Any small business owner knows that staying profitable means balancing the money that’s coming in and the money that’s going out, consistently and efficiently. Optimizing your business expenses makes that balance easier — if you focus on finding smart ways to trim the funds going out, it gives the funds coming in more profitability power.
Any number of cost-cutting strategies can work, depending on your business and the industry you work in. But the expense management tips here should be approachable and effective for most small businesses.
Check your tax deductions
Investing in a great accountant or tax professional pays dividends — they should be making sure you’re taking advantage of every tax deduction available. Home office expenses, travel expenses and equipment purchases are obvious, but other potential write-offs may be out there. The cost of independent contractors, educational expenses, certain kinds of taxes, even shipping and bank fees may be applicable. Check with your tax professional to see if you’re missing deductions that could help save your business money.
Evaluate your insurance coverage
Insurance coverage is essential for protecting a business’ assets and reducing liability. It can also be a significant expense. Are you paying for coverage you don’t need? Example: If your business is based out of your home, you may not need commercial property insurance. Talk to an insurance professional to make sure your coverage aligns with what’s necessary for your business.
Negotiate with vendors
Plenty of vendors are willing to offer discounts or lower prices if you ask — many of us just don’t start the conversation. Approach your vendors with a proposal. You may be surprised at how willing they are to work with you.
Printing and mailing costs add up, even for smaller businesses. Are you sending out paper statements, invoices, reminders or other communications? Consider whether a switch to paperless processes might work for your business. It’ll help you save money and time and reduce your environmental footprint — a win-win-win.
Invest in productivity tools
Advances in automation and productivity software keep coming, and there may be affordable tools geared toward businesses like yours that can help streamline your processes and reduce expenses. Project management tools, accounting software, AI chatbots — tech tools and software are available to automate all kinds of tasks and improve efficiency. If this isn’t your area of expertise, consider tapping an expert. The short-term investment can provide long-term cost-cutting benefits.
People have been bartering and trading for thousands of years, and the practice has multiple pluses — it’s a mutually beneficial way to save money, get goods and services you need for your business, and strengthen relationships with other business owners in your community. Are there local businesses that have needs you can help with, and vice versa? See if they’re interested in a bartering relationship.
Debt is a routine part of running a business, but if you have multiple high-interest loans or credit cards, consolidating debt helps you save money on interest and fees. If you have a business banker you trust, talk to them about what lower-interest loans or credit cards might be available. (Merchants & Marine Bank’s team is always available to help there.)
How can we help?
The business bankers at Merchants & Marine Bank are committed to helping small businesses in our Alabama and Mississippi communities thrive. Do you have questions about small business loans, business credit cards or other business banking services? Need recommendations or guidance? We’re here.