How Can Small Businesses Cut Their Costs?

These days, many small businesses across the country are finding themselves in better financial positions for a number of reasons, not the least of which is the slowly but steadily improving economy. However, that doesn’t mean that owners shouldn’t try to be as diligent as possible in seeking out new ways they can improve their bottom lines, and cutting costs is one of the best ways in which they can do so.

One of the biggest annual price tags that any small business faces these days is the cost of their facilities, because it’s usually the case that they don’t own the building out of which they operate, according to a report from Small Business Trends. As such, it might be wise for entrepreneurs to check with their landlords to see if there’s any way they can renegotiate the terms of their lease so that it’s more affordable. One way in which they may be able to do this is by committing to a longer time in which they will stay at that building, which might not always be easy for companies to do, but if costs are that big a concern, it might be worth the risk of worrying about future expansion.

Another way in which a company’s facilities can affect their bottom lines is through energy costs, the report said. While many may not consider it, the fact of the matter is that electric and heating bills can add up significantly over the course of a year, even if the percentages of overuse are minor on a daily or even weekly basis. Finding new ways cut costs here – such as by installing longer-lasting energy efficient light bulbs, shutting down all computers at night, or turning the heat or air conditioning down just a few degrees – can really provide huge savings.

What else can be done?
In addition, it might be wise for companies to consider what they’re paying for products or other supplies, the report said. Planning ahead for future needs, and then buying the necessary products in bulk, could end up costing a little more up front, but save significant amounts over time.

Finally, owners might also want to consider finding ways to reduce what they spend on their necessary small business insurance policies. Cutting costs for liability insurance, for instance, could end up saving them thousands of dollars annually.