How to Cut Down On Some of Your Key Business Costs

calculator-calculation-insurance-finance-53621For many small businesses, the best way to increase profitability is to look for ways to cut expenses. Every dollar you save is another dollar in profits and as long as you maintain quality, efforts toward cost cutting can be an effective way to provide financial relief to your business. 

You might not be able to get rid of many of these expenses altogether, but there is a good chance that you could cut your costs considerably by managing small business expenses more effectively. The following are a few of the major expenses that can impact small businesses and some of the ways they can be reduced.

Rent

Rent is usually one of the biggest expenses for a small business. If you are renting space, you need to make sure the location is serving you well. Think about whether you need all of the space you have. If not, move to a smaller, more affordable location. If your business does not depend on traffic, you could consider moving to a place that is away from busy commercial areas. 

Marketing

If you want to get more leads, attract new customers and build brand recognition, you are going to have to pay for marketing. With that said, you might be able to find ways to save money on marketing. Try to focus on the marketing channels that offer the best ROI. Investigate the types of marketing that offer a good return in your industry or talk to local business owners to find out what works well for them.

Equipment 

Depending on your business, you might need all sorts of equipment. If you are looking at an expensive piece of equipment, you might want to consider buying it used. As long as the used equipment is in good condition, it can be a way to save a lot of money on an otherwise expensive purchase.

You should also invest in preventative maintenance for any expensive equipment you have. The maintenance might cost money over time, but it can extend the life of the equipment and help you avoid expensive repairs.

Utilities

Utilities can be another major cost for some businesses. You have to cover costs like electricity, water, internet, phones and gas. One way to cut these costs is to set rules around how some of these utilities are used. Make sure resources like electricity and water are not being used wastefully. You could also consider buying more efficient appliances and equipment. Some of these pieces might cost more upfront, but they could save your business money over time.

Employee Compensation

Labor is the highest cost for many businesses. You definitely want to have a good team of employees around you, but you also want to make sure you are not spending too much on labor. Evaluate your payroll to make sure you really need all of the employees you have. In some cases, you might only need a part-time employee where you currently have a full-time worker. Making some of these adjustments can make a huge difference for your company’s bottom line.

As another option, you could also consider hiring a virtual assistant to handle some of the work that would go to one of your employees. This is usually more affordable than keeping an employee on the payroll and virtual assistants can help with a wide range of tasks.

Take the time to look at every expense to see if there is a way you could cut costs. You might not be able to find huge savings on everything, but every dollar counts when you are running a small business.

Tips for Establishing a Comfortable, Functional Home Office

Home OfficeAn ever-increasing number of people are working from home with each passing year. This includes individuals who work only from home as well as people who telecommute part of the time. As a result, the need for comfortable, functional home offices is also on the upswing.

 

The creation of a home office is something that must be undertaken strategically. In this regard, there are some specific tips to bear in mind when it comes to setting up an ideal home office.

 

Develop a Plan

 

You should not take off on pulling together a home office in a haphazard manner. Rather, you need to develop a comprehensive plan for your workspace. This includes developing a list of the critical elements that you must have for your home office. The list should cover all of the basics, like a desk, appropriate chairs, telephone, copy machine, and the like. You will also want to make certain that you identify any other special items unique to the work you will do that you need to include in your fully outfitted home office.

 

Select an Appropriate Space in Your Residence

 

Once you have developed a plan you will have a better idea of what you will need in the way of a specific space for your home office. You might have very limited options in this regard. Nevertheless, you need to make certain that the space you select for your home office can be dedicated to that use only. You need a space that will permit you privacy and a lack of distraction.

 

Work Area Versus Storage

 

A common mistake people when it comes to creating a home office is developing a great work area but forgetting about space for storage. The reality is that an office requires sufficient storage space for supplies and other purposes. Thus, when you get down to the nitty-gritty of organizing your home office, you need to make sure that you strike an appropriate balance between suitable work space and sufficient area for storage.

 

Proper Lighting

 

Another area that many a home worker fails to pay appropriate attention to is lighting. You need to make sure that you have suitable lighting for your home office. Ideally, you are able to set up your home office in a space that has a nice amount of natural lighting.

 

Beyond natural lighting, you will want to make sure that there is sufficient overhead lighting in the space. In addition, you might want to consider what best can be called task lighting. For example, you will want to ensure that you have a suitable light on your desk or other work area.

 

Dedicated Phone Line

 

This might seem like a small point but you definitely want to make sure that you have a dedicated phone line for your business. There are a number of reasons why this is important, including you really do not want to make your personal telephone line public. The reality is that a dedicated home office phone line may be a given inasmuch as many residences no longer have landlines anyway.

 

Keep Personal Matters Out of Your Home Office

 

You need to make sure that you establish firm boundaries between your home office and personal matters. A key reason why you want to take this approach as to do with taxes. If you properly maintain a work space in your home you are able to take a tax deduction for that space. You can deduct that portion of your mortgage or rent payments that can be attributed to the amount of space dedicated to your home office, provided you don’t mix business with personal in that area.

 

Another primary reason why you need to maintain firm boundaries between the home office and the rest of the residence is to better ensure your own productivity. You tend to work in your office and enjoy your personal time outside of that area.

 

Maintain Office Hours

 

One of the benefits of working from home is flexibility. With that understood, you still need to maintain a sense of discipline when it comes to conducting business from a home. As a result, you are wise to establish specific office hours each week. Establishing office hours accomplishes two important goals. Taking this approach provides you structure, which enhances efficiency. In addition, establishing specific office hours lets other people in your home know when you cannot be bothered because you are working. Everyone can plan around your office hours, provided that they are made aware of them in advance.

 

=====

 

Jessica is a professional blogger who writes for Faxage, a leading company that provide Internet fax service services for individuals and businesses.