Be Smarter and Save on These Unavoidable Business Expenses
You gotta spend money to make money, right? In the world of small business, this is true to a certain extent. A dollar here and a dollar there means a lot more when margins are tight, and you have to make sure you aren’t spending too much money — even on those unavoidable expenses. Here’s how to save so that you can really grow your new business.
Don’t Overspend on Equipment and Supplies
For starters, you’d be remiss not to look for money-saving deals and coupons for major office supply retailers like Office Depot — especially if you are buying in bulk. The costs of basic supplies can sneak up if you’re not careful. When it comes to equipment, there’s evidence that renting is much more cost-effective at the beginning. In the long run, you may want to move to buying equipment to save money, but when your business is new you need to use that capital elsewhere. Plus, leasing equipment helps you be able to keep it current.
Protect Your Assets
Running a business comes with a significant amount of liability, so it’s important to protect your personal and professional assets. One of the easiest and most cost-effective ways to do this is to establish your business as its own legal entity. In the event something goes wrong with your business, this simple task could save you a lot of money in the long term.
Many business owners choose an LLC because of its flexibility to scale and adapt as your business grows. As an added bonus, it is one of the easiest entities to set up, requiring only a few steps. While you can always hire a lawyer, you can save money by using an online service to create your Washington LLC. You can even set it up yourself, if you are confident in your legal knowledge.
Reduce Your Energy Footprint
Energy costs are something new business owners rarely consider but should on a daily (at least monthly) basis. When it comes to saving on this front, it’s a bunch of little things that add up. This includes being cognizant of your lighting (turning them off when the office is unoccupied — maybe with the help of a timer), using more efficient bulbs, installing programmable thermostats to reduce heating/cooling waste, and more. Make sure that the equipment that you rent is also energy efficient (your printers, computers, and even coffee makers).
Taxes, Taxes, Taxes
One of life’s (and business’) certainties is taxes, and it’s an expense area where owners often take a hands-off attitude. “I’ll pay what I have to pay,” you might say. This is a mistake, as there are a lot of ways to trim the fat in both your actual tax payments (write-offs, etc.) and their preparation. Be smart about your exemptions. They can include vehicle costs, employee insurance, depreciation of business assets, and even the cost of getting your taxes prepared professionally (which is recommended for new business owners).
Some think that taxes are a once-a-year obligation, but that’s wrong. Part of saving on taxes is thinking about them every day and being organized and prepared throughout the entire year.
Save on Payroll
One of the greatest “hidden” costs in small business is payrolling. There’s a lot that goes into getting your employees paid and making sure they are paid correctly and without error. To save on payroll processing, you should opt for direct deposit (which reduces the cost of lost and fraudulent checks) and outsource the work to avoid penalties incurred by improper processing.
“Processing payroll has so many components — tax payments, employee garnishments, withholding Social Security deductions, contractor vs. employee designations, etc. — that can trip up small business owners and result in hefty fines,” notes Staples.
Beyond that, make sure you research your best (and most affordable) payroll options. You may even be able to negotiate a better deal depending on the size of your business — so don’t be afraid to haggle to get a better price!
As a new business owner, you must make cutting costs a priority on a daily basis. Think about it this way: Is it easier to move a 300-pound box all at once or ten 30-pound boxes over time? You can save money that can be used to grow your business by smartly targeting these unavoidable expense areas and making them less of a burden on your everyday operations.
One of the best ways to spend your money effectively as a business owner is to find the best employees. That’s where Integra Personnel comes in. Specializing in the insurance industry, Integra Personnel can connect you with talented, committed new hires. Call 206.365.7794 or email contact@integrapersonnel.com to get started.
Photo by Artem Bali on Unsplash
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