There are many aspects to running a business that owners can love -- marketing, promotion, customer interactions, dealing with clients, and creating a productive climate for employees, just to name a few. But for many, dealing with the numbers -- day-to-day business expenses -- is not one of them. Here are some simple ways those that would rather leave the finances to someone else can cut their business expenses and have more time, energy, and cash to focus on what they truly love.
There is seemingly no end to the busy and costly work of covering details that will make a difference. These often include designing a logo, building a website, reaching out to connections, and myriad other things you're eagerly engaged in.
One critical item often pushed to the bottom of this checklist is forming a Virginia LLC or other legal entity type. Establishing a legal entity type is a requirement of most states, but it also will help protect you as the business owner from liability. The process varies by state, though, but typically can be completed in five steps and at less cost when you use a formation service.
When hiring new employees for positions you really need filled, consider some alternatives. Think about looking for temporary labor, contractors, and freelancers to perform specific jobs that you need done in a short time frame. You won't have to pay them a guaranteed salary or benefits, and you can release them when the job is complete. And as Fox Business points out, there's an advantage to hiring a temp worker full time if you do end up needing that: you'll save on training costs.
Interns are also a good option to consider. As long as you’re focusing on giving the intern valuable on-the-job experience, it's okay to enjoy this low-cost labor source. Just be sure you never make any promises to an intern that you can’t keep.
One of the biggest expenses that business owners often overlook is the cost of having a bunch of employees in an office. Employees use resources. Travel costs are also a major expense -- for both you and your employees.
One way to reduce this is to allow for more telecommuting. Technology has advanced to a point where holding meetings, conferences, and even hour-to-hour communications can easily be done over the internet. Not only will you save on utilities at the office, but you will also be helping to create a culture of less material waste. This sort of thing spills over when you and your employees "go digital" and "go paperless" in other aspects of your business.
Editor's Note: The concept of telecommuting has existed for decades but has taken on a new identity as "WFH" or "Work From Home" in light of the COVID-19 Response.
Speaking of marketing, internet-based marketing is not only what’s going to drive new, modern customers to your business but it is actually among the most cost-effective forms of marketing.
Maintaining a sleek, informative website and a robust social media presence is pretty much free advertising. Using search engine optimization techniques for the best website/blog placement in search results is also relatively inexpensive. You can also advertise directly on search engines like Google and social media platforms like Facebook for a fraction of the costs of traditional Print / TV advertising.
Not overbuying inventory (even if it seems like a good deal) is probably the easiest way you can reduce your fixed expenses and make them more variable. As Intuit says, "small businesses can’t afford to tie up too much of their working capital in idle inventory."
Rent equipment instead of buying it outright until you're sure you'll need it;
Negotiate lower rent (or move to a smaller space);
Rely more on the "Internet storefront" if at all possible.
The leaner you can run your finances the more apt you'll be to want to dig in and make the numbers work for your company.
Remember, if you just can't seem to get the hang of managing your business expenses there is plenty of help out there.
Disclaimer: The opinion of Insercorp Water Cooler Bloggers are of their own and do not reflect the official position(s) of Insercorp LTD