Expenses are a big part of your business, and when you’re just starting out, you don’t have a lot of capital to shell out. Thankfully, there are some tips you can heed to cut down on those costly business expenses, from smart phones for everyone in the office to commission and base salary combos. Check out the following ways to safely cut business expenses, as well as where you should never cut.
Cut Back on Individual Technology
Does everyone in the office really need a smart phone? These days, most people have personal phones anyway. You’re adding to your budget unnecessarily when you hand out iPhones like they’re candy. Cutting out the gadgets, says Bankrate, can encourage higher rates of productivity, as people tend to waste a lot of their time reading and responding to emails or browsing on social media. When it’s time to invest in computers for your employees, don’t go big. Instead, go with small netbooks that cut down on expenses but that still boost productivity and efficiency in the office.
Keep Track of Your Expenses
Just like you would with a personal budget, analyze your spending to see where you can cut. Chances are, there are several places where extraneous spending is going. Cut out those lattes in the morning or nix one office lunch once a week. You’ll soon realize what is not essential to the operation of your business. You can identify those areas by going through your last three months of expenses and select the line items that are not crucial to the operation of your business.
Commission Only
Many employers attract workers with the promise of a base pay plus a hefty commission on sales. Rather than go this route, go with a commission-only structure so that your employees hold a high interest in how successful your business is. Don’t cut salaries or benefits, but instead put off those bonuses and raises to keep everyone employed during tough times. Just make sure they know why you’re doing that. Chances are, they’ll understand.
What Not to Cut
There are some things you just can’t cut out of the budget. Those are factors that contribute to the overall functionality of your office and the quality of operations. Invest in quality equipment, such as commercial trash chutes, for instance, that offer a clear value, efficiency and ease of use to your organization. Another thing not to cut? Your advertising budget. You may feel comfortable right now relying on your existing client base but there will come a time when the economy takes a turn for the worse when you will wish you had kept up with the exposure that advertising money provides. Don’t be tempted to reduce training expenses, either. By properly and thoroughly training your employees, you are building a better, stronger workforce, that will benefit you in the long run. An easy place to cut is within salaries of your employees, but don’t do this. Not only will morale plummet, performance levels may drop due to employees feeling that they are being undervalued.
Follow these simple tips to reducing expenses the smart way and your business will benefit all around.
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