As inflation remains high, we’ve all been feeling an acute pinch in our wallets. It’s not your imagination; money just doesn’t go as far as it did in the recent past. Now, more than ever, is a great time to find ways to reduce your business expenses. Not only will it help you stretch your resources further in the short term, but you’ll develop great habits that will help you be a financially savvy business owner whose company is able to make the most of every dollar.
Here are some ways Hayes and Associates is advising our clients to decrease their business expenses this summer.
1. Do Your Research
Whenever you need to replace equipment or utilize a service, it may be tempting to continue doing what you’ve always done or select the first option in your search results. That strategy is built on convenience and assumptions that what you’ve bought before gives you the most bang for your buck or that familiarity and experience with a service provider is your best bet. Those assumptions could be accurate, but taking the time to explore your options before making a commitment could deliver considerable savings.
2. Perform a Cost-Benefit Analysis
Looking to invest in something new? No matter how appealing, efficient, or cutting edge it appears to be, carefully evaluate the specific ways it can benefit your company. Will it save time? Manpower? Money? How long will it take for this investment to pay for itself? Most importantly, is this a necessary purchase at this precise time? By limiting your spending to only what is necessary, you can significantly reduce your cash outflow. A thorough cost-benefit analysis will enable you to make your decision with confidence.
3. Evaluate Which Business Expenses Can Be Changed
Assume a growth mindset toward every facet of your business, from your facilities to procedures and even staffing. New technologies, new office designs, and employment options mean that what worked well for your company five or ten years ago may no longer be the best way of getting things done.
If renting your shop space is too expensive, relocation may be advantageous, but so too might be purchasing a building and operating our own space.
Giving employees a hybrid work option can cut down on office utilities and make workspace usage more efficient. Incredible business software is available to help make remote work just as effective as working in the office…without the daily commute.
Operation systems have improved dramatically for bookkeeping, invoicing, and more. Investigate newer programs that will improve efficiency and save your company time and money.
Insurance costs are often burdensome business expenses, but you may have options. Make inquiries of several providers and see who offers you the best rate for the coverage you need. Bring that quote to your current provider and see if they will be willing to negotiate better terms for your company. Keeping good customers is important, so you may be pleasantly surprised by the efforts they make to continue doing business with you.
4. Improve your Marketing Efforts
No facet of business is evolving faster than marketing. Potential customers are looking online to find the products and services they need. If your website and social media presence are lacking- or have simply been left on autopilot- it’s time for a refresh. Partnering with a professional marketing company can help you target the ideal audience and maximize your reach.
5. Meet Only When Necessary
The pandemic changed the way we got work done. Those incredible tools for collaboration, communication, and virtual meetings haven’t gone away, and can help you cut business expenses tremendously as you reduce business travel in favor of virtual meetings. They can also keep you from having to meet in person as a staff regularly. More often than not, meetings disrupt productive work and consume far more of the workday than is necessary. As a rule of thumb, only meet when absolutely necessary, and always stick to a strict agenda. Your employees will thank you!
6. Right People in the Right Places
As you continue to evaluate every facet of your business, look at your employees as well. Do they have experiences and talents that are being fully utilized, or might they really shine in a different position? Don’t be afraid to adjust roles. Employees who are working in their areas of strength and skill are going to be happier and more fulfilled at work, reducing turnover and maximizing profitability.
Additionally, when it comes time to hire new workers for a specific role or project, consider 1099 contract employees as a viable option. Not only do you have an expansive, global talent pool to draw from, but you’ll be able to utilize their talents only as long as they are needed, as opposed to bringing someone on board permanently.
7. Remember Your Purpose
In the day-to-day busyness of operating your company, it can be easy to get bogged down in the details. Pause and reflect on the reasons you started your business, its original mission and vision. Your mission is the guiding principle by which every opportunity is evaluated, and decision is undergirded. If the reflective process of evaluating your company has revealed ways you’ve gotten off track and wandered from that vision, it’s time to realign priorities and focus on what matters most.
When to Call in the Professionals
If your assessment of your company’s financial health and quest to reduce business expenses has still left your overhead greater than the recommended 35% threshold, or if you’d like an objective outsider to help you evaluate your company, Hayes and Associates is here to help. As a full-service accounting firm in Omaha, we help businesses thrive and grow. We would love to help yours do the same. Give us a call today to set up a consultation.
