Small business operating costs typically include your office rent, Internet services, payroll expense and advertising costs. If you own a retail store or a restaurant, your operating costs may also include inventory, supplies and insurance for various types of equipment at your business location. You may not know exactly what your operating costs are until the end of your first year of operations, but once you have an average monthly figure, you can find ways to start cutting back to streamline your finances. Doing so may help to boost profit margins and ensure that you’re not wasting money on unnecessary expenses just to stay in business.
Use these tips to cut unnecessary operating costs and trim the fat off your small business expenses:
Go Paperless, Mobile and Digital
With today’s advances in mobile and wireless technologies, it’s becoming increasingly easier for small businesses to “go paperless” and rely less on office-based operations. You might be able to cut back on paper and printing costs by switching to digital documents and by using e-faxing services. If some employees could work from home, you could reduce your office size or rent out a portion of the office to cut back on rent expenses – among the biggest operating costs for small business owners.
Shop Around for Telecommunications Packages
If your small business relies heavily on telephone communications, don’t be afraid to shop around for the best deal on phone lines and cellular service. Make sure you’re only purchasing what you actually need, and seek out a great deal from at least two or three competitors in the industry. Consider an Internet-based phone service so that you don’t have to invest in a landline package.
Promote Green Office Practices
You can conserve a significant amount of energy by practicing some “green-friendly” habits in the office. Make sure all computers are completely turned off at the end of the day. Make the switch to eco-friendly light bulbs, and limit the use of blinds or curtains in the office to let some natural light in. Recycle paper within the office so that you’re not spending an excessive amount on paper and supplies for day-to-day operations. Simple changes can help to offset some of your utilities expenses and reduce operating costs overall.
Cutting back on some of your larger — and even smaller — operating expenses can help to improve cash flow and keep your small business afloat during the long run. Use the tips above to cut operating expenses without compromising overall business operations.