As you wrap up loose ends for 2017 and prepare for filing taxes, it's natural to focus on your business finances. Every small business could afford to save more money, right? The end of the year is an ideal time to review your business spending and pinpoint areas where you can save money next year. Here are five ideas for cutting costs in your small business.
- Review recurring expenses. Every business has them — those memberships, subscriptions or services you sign up for and then stop using. Since many of these renew automatically, it's easy to get stuck paying more than you need to. Go over your credit card statements to see what recurring expenses you're being charged for and which ones you can eliminate. Once you've winnowed down your recurring expenses, set calendar reminders to review them before the next auto-renewal kicks in.
- Assess your insurance. From employee health insurance to business owner’s policies or key man insurance, your insurance needs are likely to change from year to year. Meet with your insurance agent/s annually to go over your insurance plans and make sure you’re adequately protected — without paying for coverage you don't need. For health insurance, ask if there are ways to lower your company's premiums through employee wellness plans, or consider shifting more of the costs to employees in the coming year.
- Conserve. Saving water, energy and paper isn't just good for the planet — it's also beneficial to your businesses' budget. Put an environmentally conscious employee to work identifying areas where you're wasting natural resources and could cut back. Small changes like storing documents in the cloud instead of printing them, adjusting your thermostat settings, turning off lights, refilling toner cartridges or using energy-saving appliances can save your business big money. Check with your local utility company about conducting an energy audit of your business to see what you’re wasting and how to conserve.
- Think virtual. Almost every aspect of your business can be conducted digitally these days, and that can really slash your spending. Instead of mailing out postcards to prospects, for example, get their attention by enhancing your business website, improving your website's SEO or increasing your presence on social media. Videoconferencing can eliminate much of your need to travel to meet customers or vendors in person.
- Save time. Time is money. In the coming year, look for ways you can eliminate time-consuming administrative tasks or save steps on things you do every day. Instead of saving and organizing paper receipts, for example, why not just scan them into the cloud with an expense app on your smartphone? If you’re still keeping your business’s books on paper or even on a spreadsheet, switch to a cloud-based software program. You’ll be able to share your financial information with your accountant, banker and tax preparer, saving everyone time and hassle.
Get your employees involved in your cost-cutting crusade, too. Have them help you brainstorm ways to save money. Then reward them with a bonus based on a percentage of the savings.