Every business looks for ways to cut costs. Whether starting a new business, struggling to pay bills or just trying to add to the bottom line; there are a number of easy ways to cut costs or just spend more wisely. Implementing just one can make a big difference.
Here are the main areas that are easily overlooked where you can reduce expenses without interrupting the daily operations or compromising your business.
Credit Card Processing
In this day and age, almost every business has a need to accept credit cards. It is very likely that you are able to cut back on the fees that the processors are charging. Because of the multitude of complicated pricing structures out there it may be difficult to know where to look.
First, look for a trusted comparison site like midbids.com or cheaperprocessing.com. Second, know the right questions to ask any credit card processing provider:
- Is there a cancellation or early termination fee?
- Is the payment processor compatible with your online shopping cart?
- Is interchange plus pricing an option? With interchange-plus pricing, you can see exactly what MasterCard or Visa charges plus what you’re paying the processor. If you currently have another pricing model, fees may not as easily identifiable. Processors can overcharge you without you recognizing it.
- What fees will be charged aside from each transaction cost? Be aware of the annual or monthly fees, regulatory fees, compliance fees, and statement fees. Ask about this upfront. A lot of these fees are unavoidable but they should cost you no more than $300 annually.
Look for Local Tax Incentives
The government on a state or city level often offers financial incentives to private businesses making investments. Incentives may involve tax abatements, tax revenue sharing, grants, infrastructure assistance, no or low-interest financing, tax credits and other financial resources. Check with your state and city government to see what may be available to you.
There are two ways to view this. Does it make sense to outsource something you are doing in-house OR does it make sense to bring something in-house you are currently outsourcing. It comes down to simple math; calculate the cost of the employees, taxes and benefits and consider the possible materials, equipment and extra rent involved with the space you will need OR could cut from what you are currently spending.
For some professional services, you may have to outsource. For example; few businesses need an attorney on staff full time. Handing out money at $300 per hour is no way to run a business. Ask your lawyer to give you a discount or shop around for someone who will. Make sure you understand what your lawyer’s minimum billing interval is. Prepare your questions before hand to ensure you use all of the time you’ll have to pay for.
Sublet Unneeded Space
Your real estate is an incredibly valuable asset; make sure you maximize its potential. If your business downsizes or you have an extra space, rent out unused space if your lease allows it. You might even want to look at moving your business to another location and renting out your entire building.
Renegotiate Your Lease or Move
Renegotiating an ongoing lease to get a lower rate can be difficult but if the economy in your area is turning downward and your lease will be up for renewal soon, your landlord may be willing to negotiate to keep their occupancy up.
Even if you have a long-term lease, it is worth the renegotiation. If there is an abundance of vacant properties around you and you are able to show your landlord that, without a reduction in rent, your business won’t survive, they may be willing to accommodate you.
Cut Back on Insurance Expense
The last thing you want to do is jettison essential insurance coverage for fire, theft, and liability; but by raising your deductibles or canceling less essential coverage, you should reduce your overall costs. It makes more sense to save on insurance if your business is organized as an LLC or corporation than if you are a sole proprietor or partner making you personally liable for any business losses or mishaps.
Reducing the spending of your business is simple if you know where to look.