As a business owner, you know that you must keep expenses as low as possible so you can keep more of your profit. However, knowing this and putting it into practice are completely different things. According to the small business section of Bankrate, the first thing you should do when you are attempting to reduce expenses is track what you currently spend. As with personal budgeting, you can’t make progress until you know how your business spends its money.
You should plan to track your business expenses for at least three months to help you determine patterns and wasteful spending. Don’t worry about reducing your spending during this time, but instead focus on diligently recording every penny you spend on business expenses. The categories listed below are some of the most common areas where business owners tend to spend too much money.
Salary, Benefits and Bonuses
The online edition of the Houston Chronicle advises business owners to tread carefully when it comes to making changes to the compensation of current employees, regardless of how much money you could save. If you are aware of employees who would prefer a more flexible schedule, offer them the option of working half or three-quarter time and accepting the benefit reduction that goes along with this.
If your business is not currently turning a profit, let your employees know that you must defer raises and bonuses until it returns to profitability. This puts the responsibility in the employee’s hands to work harder to achieve his or her own financial goals.
If you hire sales staff, consider advertising future openings as commission only. When people see the correlation between their hard work and their compensation, it motivates them to try even harder the next month. The next time you need to fill an entry-level position, contact a local college to inquire about the availability of interns. If that doesn’t work, you may want to hire two part-time people to fill one role. This can add up to considerable savings on employee benefits.
Buy Wholesale
Whether you need paper towels for the restroom or several new computers, there is no reason to pay retail price. If you don’t have a warehouse club in your area, go online to find one that will ship your supplies. Even with the cost of membership and shipping, you stand to save a lot of money buying wholesale. Another option is to connect with business owners in your area who are in a similar line of work. When you form an alliance with them, it allows you to approach manufacturers as a group and request a lower price structure.
Strive for Energy Efficiency
According to Amigo Energy, some employees are always hot while others are always cold, but as the business owner, you have the right to control the thermostat. Set the thermostat at an acceptable level and make it accessible only by key so no one can change it. By keeping the temperature consistent, you can save considerable money on energy bills. Other things you can do include ensuring that your building has adequate spray foam insulation, install tinted windows, install commercial led lighting, and use high quality 12V LED Drivers to ensure the lighting runs as efficiently as possible. This along with setting an automatic timer to turn the lights off at night in case the last person to go home forgets should take care of the lighting aspect of your office or facility.
This article was contributed on behalf of Amigo Energy, your number one choice when looking for affordable energy. Check out their website today and see how they can help you!
