How Small Business Owners Reduce Costs

Small business owners are definitely genius at finding ways to reduce overhead and other costs. It may be because they often have less money to play around with, but even the rich cats can learn from these cost cutting wizards. 

The first lesson that can be learned from small business about reducing costs is to have a clear idea of how much money is going out on fixed expenses and how much on indiscriminate spending. Then formulate a plan of action to reduce costs wherever possible. 

Fixed expenses like corporate taxes, payroll, insurance, property lease and loan payments, utilities, phone, and internet access may all be bills you have to pay out monthly or on a fixed schedule. However, it is possible to reduce the costs of many of these. Hire a CPA to ensure that you are taking advantage of all of the tax savings available to you as a small business owner. Outsource office work to a business assistant rather than having to pay more for your own employees to do the work. Talk with your insurance carriers and loan agents to check for the possibility of rate reductions or early pay deductions that can significantly reduce the costs of these. If you provide health insurance to your employees, shop around for lower cost insurance plans or employee participation plans in which the costs of the insurance are shared between company and employee. Utility costs are simple enough to reduce with energy saving equipment and avoiding wasteful energy usage such as leaving lights on when not needed.  Use your computer and internet connection to find phone and internet plans costing less than the ones you currently use to reduce costs further. The point I am trying to get across to you is that even costs that are assumed to be fixed, can often be reduced by simply asking for reductions or shopping for ways to reduce costs. 

Indiscriminate spending drives up costs and most times people are not even aware of how these expenses really do add up fast. Small business owners who are intent on reducing costs must have an accurate accounting of how much money is being spent unnecessarily, and institute policies to curb or eliminate these costly habits. Indiscriminate spending such as daily purchases of overpriced coffee from the local coffee shop, fast food or restaurant lunching, and subscriptions to newspapers and magazines that never get read are wasteful spending that is counterproductive to reducing costs and increasing profits. Indiscriminate spending wastes the money that could be better spent on useful activities such as outsourcing office work to business assistants. Purchase a reasonably priced coffee maker and make your own coffee at the office. Be green conscious while you are at it and do not use Styrofoam cups. Use personal coffee mugs instead. Only lunch out when it is necessary for business. In that case you can write off most of the expense on your taxes. But make it a policy to bring your own lunch to work instead of wasting money on regular fast food and restaurant lunch purchases. Do you really need to continue wasting money on those newspapers and magazines that no one ever has the time to read anyway? Only subscribe to those with valuable information that can be used in your business and that will actually be read, and shop for the cheapest subscription rates on these as well. 

You can be a small business genius cost reducer yourself if you take the time to get an accurate accounting of all of your fixed expenses and indiscriminate spending habits, and then formulating a plan of action to reduces costs wherever possible.

Sarah Reiter is president of Creative Agent Solutions, an Arizona based online marketing company that specializes in virtual real estate services.  Sarah Reiter is an ethics checked Certified Real Estate Support Specialist (CRESS) with the International Virtual Assistants Association (IVAA), a Professional Real Estate Virtual Assistant (PREVA) with the Real Estate Virtual Assistant (REVA) Network, a CyberStarVA Member, an affiliate of the Southeast Valley Regional Association of Realtors (SEVRAR), Scottsdale Association of Realtors in Arizona (SAAR), and Arizona Small Business Association (ASBA), as well as a Certified Virtual Assistant (CVA) with the Settlement Room ™. 

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