New Business Owners: 3 Tips for Cutting Costs Around the Office
Starting a new business comes with a lot of highs and lows. When you first decide to be your own boss, you probably felt invincible. However, when you forget or miss some nuanced business-related issues, you might feel like you are in over your head.
Guess what? You’re not alone. Nearly 6.5 million small businesses start up in the United States each year, adding to the roughly 30 million already in existence. However, when you lose money before you make money (which is pretty common), alone is exactly how you feel. When it comes to managing and understanding business expenses, cutting costs — without cutting quality — doesn’t have to be an insider secret. To help you get started, here are three ways you can save money from day one.
Be Smart About Expenses
You will almost assuredly have money going out before there is much of it coming in. When starting out with a low overhead, look for products, processes, or positions you can combine. For example, if you need to hire a graphic designer to help with marketing your product, find one with plenty of experience designing websites or e-commerce platforms. If you are looking for a storefront, find one with space where you can manufacture and package your merchandise.
Another helpful combination that cuts expenses when you’re starting out is finding software that solves multiples problems. For instance, instead of paying for three separate systems, find one financial platform that helps with automated billing, payroll, processing payments, creating budgets, and tracking taxes. You can save even more money by using coupons and promo codes to purchase business-related software from retailers such as Office Depot.
Be Smart About Energy
When you start running a new business, it’s tempting to keep the midnight oil burning all night long. However, that’s the quickest way to get burned out. Not only will you struggle to keep that pace going — damaging your mental and physical health in the process — but you’ll also struggle to keep the energy bills reasonable. Saving energy is a simple and effective way you can save money. Any time your equipment, from computers to bathroom lights, aren’t in use, turn them off. If you have an office or a store, consider installing large windows that allow in natural light so you don’t have to use as much electricity during the day. Also, think of energy-saving as a long-term investment. If you purchase energy-efficient equipment, you may pay more upfront, but the savings will roll in every day.
Be Smart About Taxes
While taxes seem intimidating, just keep in mind they are often on the side of small business. The IRS has many incentives and tax breaks for people launching a new business, so be sure to take advantage of any and all you can. First, keep track of your deductions, like retirement contributions, vehicle expenses, health insurance, and depreciation of assets in your business’ first year. If you are unsure how to manage all of these, hire a tax professional — that is a tax deduction, too! You can deduct a lot, but you can’t write off everything. That’s why it’s equally important you consider starting a savings fund just for paying taxes. You can even make estimated payments each quarter, reducing the amount you could owe come April.
Small and new businesses are essential in the US economy. Your success is also your community’s success. Cutting costs and focusing on saving money can help prepare you for the long — and exciting — road ahead.
Written by Jim McKinley