You have to spend money to make money. But you don’t have to spend frivolously. The less money you can spend the higher your profit margin, in business. But figuring out how to keep your business costs low can be a struggle at best and a downright headache at worst. Here are a few extra tips on how to keep your major business costs low.
Find and Eliminate Waste
There are always areas in your business where you are spending money that is going to waste. Maybe you are buying too much of a perishable material that ends up getting tossed when It can’t be used in time. Or maybe you purchase an inefficient size of material that you have to cut and eliminate the scraps. Or maybe it’s something as simple as always having donuts in the break room that never get eaten.
Whatever your budget looks like, Planet Experts says there is almost certainly waste that you can eliminate. Take a careful look at everything you spend money on and think very carefully if there is any waste involved. You can save yourself loads of money by identifying and minimizing waste.
Look For Tax Savings
Nobody likes taxes. But there are a lot of ways to lower your tax bill to save money. The first place you should look is making the most deductions that you can. Office supplies, business property rental fees, utilities, insurance, and even depreciation on equipment can all be deducted from your tax bill.
But another key way to get tax savings is to have your business set up the right way. If you operate everything correctly, Freeman Lovell says an S-corp can save you money on taxes. S-corps operate with what is called pass-through taxation, meaning that tax responsibility, deductions, etc. are all passed to the owners rather than the business. This can mean tons of savings for your business.
Pursue Efficiency
According to HR Cloud, the efficiency of your business is ultimately the best way to keep costs down. You want every moment that you are operating to be making the most money in the least amount of time, for the least amount of work. Try to make your operations efficient—having scheduled times for meetings, keep office distractions to a minimum, and offer incentives to complete tasks ahead of schedule. Simple things like this can increase productivity without increasing costs—which means more money at the end of the day.
Operating a business can be very expensive, but there is no way to get something from nothing. Still, there are ways to lower your costs and increase your profit. If you follow these pieces of advice, you can keep your business costs low relative to your profit, and that means a healthy and profitable business.
Read this next: How to Manage Your Reputation When Your Business Screws Up
Are you a startup accelerator, incubator, or investor?
Find out how AccelScore can help you manage your startups and cohorts