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5 Ways to Cut Business Costs by Cleo Gib

5 Ways to Cut Business Costs by
Article Posted: 12/17/2015
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Articles Written: 12921
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5 Ways to Cut Business Costs


Whether your business’s budget is tight or you’re ready to stretch your profit margins a bit further, there are many things savvy business owners can do to save money. Businesses will often look in all the familiar places, like cutting staff, when they should think creatively about things like using Indiana utility sales tax consultants to find savings. Cutting costs is easier said than done, but when you’re in a budget pinch, these creative solutions may help rescue your bottom line.

Rethink Discretionary Spending

Most business owners will first look to cut costs by cutting discretionary spending. Discretionary spending likely comprises a good chunk of your business’s cost. This spending includes nonessential employees and nonessential maintenance. For example, you may have your office copy machines serviced every month. When your budget is tight, it may be time to stretch that service, only having your copy machines serviced every two or three months. Nonessential employees may include a front office person with a primary task of directing phone calls and greeting visitors. In a small office, this is a task that all other employees may pick up when money is tight. You may also choose to delay projects or hiring new staff. Unless adding a new staff member or project is critical to your marketing or growth, now may not be the time if cash is already tight.

Shorten the Work Week

It may seem counter-intuitive to work fewer hours when money is short. However, you can save employees by shaving a few hours off the work week, especially if many of your staff members are hourly. If you cut a full day, going from a 5-day work week to a 4-day work week, you will save 20 percent, and if that work week cut means closing the office one extra day per week, you’ll also save energy costs. If the office is closed, no one is running the air conditioner or firing up the fax machine. In many cases, shaving hours off the work week will not mean lowered productivity.

Sublet or Downsize Space

If you have space in your building or office that is sitting empty, now may be the time to consider subletting some of that space to another entrepreneur. Real estate can be one of a business’s most valuable assets, and in tough economic times, it makes sense to make money using it.

Another option, if you find yourself with more space than you need is to downsize. This may mean selling your current location and relocating to a smaller, less expensive building. Or, it may mean negotiating with your lease holder about moving to a smaller property owned by the same entity. You can also attempt to renegotiate your existing lease. It’s more cost effective for your lease holder to keep an existing tenant than to find a new one.

Reduce Printing Costs

There’s a good chance you’re still running far more paper through copy machines and printers than you need, both in your office itself and through your marketing efforts. If you are printing marketing brochures or business plans, you can cut costs by opting to print in two colors, rather than four, or print in matte rather than glossy.

When business is tight, start making changes as soon as you recognize the financial pinch.

Seek Tax Incentives

You may be eligible for tax incentives that you aren’t currently using or taking advantage of. Some municipalities, for example, may offer property tax incentives for upgrades to your property and some states offer incentives for creating jobs or manufacturing items within their borders. For example, Indiana and Iowa offer tax utility exemptions for energy used to manufacture goods. You can seek the assistance of Indiana utility sales tax consultants, or consultants in your state or locality, to determine whether your business is eligible for a tax incentive.

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