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5 Business Expenses to Cut Today

These simple changes can have a measurable impact on costs.

As you begin a new year, start yourself and your business on firm financial footing by looking at ways to reduce your business expenses.

Every January arrives as a perfect opportunity to take control of your business expenses and—the best news of all—it’s easier than you might think. Read on to discover why this is an excellent time to reduce your business spending and increase your day-by-day profits, starting today.

The 12 months of insight

By the end of every year, you have 12 full months of financial data that help you see how your business expenses have evolved over the previous year. Naturally, you’ll hope to discover that you’ve kept control of costs, month by month. More often than not, though, many sellers uncover some bad expense habits have taken hold over the past year. Whether you incurred new unplanned costs or absent-mindedly increased existing costs, every year end is your opportunity to give your business a much-needed expense tune up.

Begin your expense defense for the new year by collecting data of your previous year’s spending activity. Whether you use a bookkeeping software application or simply enter data into a spreadsheet, look for trends in your expense spending as the past year progressed.

Some very common costs are low-hanging fruit in terms of reaching up to harvest some quick savings
Take the extra few moments to view a graphical representation of your costs by viewing the data in bar charts or pie charts. The images are often more telling—and have greater impact—of your expense activity than numbers alone. The data is brutally honest, too, letting you know how well you controlled your costs over the year. This is an important step since you can’t truly make a reliable cost control plan, going forward, unless you truly understand what you’ve been doing in the past.

Business expenses you can reduce right now

While it’s true that each business has its own unique expenses, many share some very common costs that are low-hanging fruit in terms of reaching up to harvest some quick savings. Here are five of the most common expenses that you can control, starting right now.

1. Control your borrowing costs. Practically every financial adviser will tell you that interest paid on borrowed money-by way of loans or credit card debt-is money lost. True, sometimes your business needs the benefit of being able to spend beyond your available cash assets, and it’s wise to tap credit lines to help invest in new business inventory, fixtures and tools.

For the year looking forward, see if there’s a way to avoid ongoing interest costs by borrowing only what you need, when you need it. Pay back the debt as fast as possible to reduce applied interest and reduce the bookwork maintenance of a debt. Also, shop around for lower interest rates. The beginning of every year is prime time for lenders and card issuers to make new-year offers. Take advantage of zero-percent balance transfers (watch out for the transfer fees, though), and develop a plan to pay off the balance before the promotional period expires.

2. Use your business’ available cash or credit for all of your expenses, even small ones. If you pay for things like fuel, postage, office supplies and such using your personal cash, you’ll never see those costs when you analyze your business expenses. Keep them all within the business’ financial flow, and you’ll likely discover additional expenses that you could—and should—take control over.

3. Save on phone costs with lower-cost plans and agreements. If you use a land line for your business calls, check with your service provider to determine if there are lower-cost packages that can make long-distance calling cheaper, such as a flat monthly rate versus a per-call charge. If you use a cell phone for your business, be sure you use it only to talk business.

Keep personal calls separated, so you’ll get a clear picture of your true business-phone usage

You might discover that business calls don’t require a high-minute package, helping you reduce your monthly cell phone charges. (Some business owners have opted for pre-paid accounts, rather than pay for minutes they never really need). Keep personal calls separated, so you’ll get a clear picture of your true business-phone usage. And, whenever possible, use email from your business computer.

4. Plan your travel strategically. Whether you’re travelling long distance for business meetings or simply running errands around town, plan those trips with precision. For day-to-day travelling, develop logical routes that allow you to complete your business tasks in a single outing. Try to travel at nonpeak traffic times to avoid wasted time and fuel in a bumper-to-bumper gridlock. Also, try to establish set days when you’ll run your errands, reducing the fuel you’ll use, compared to running daily routes.

For business trips, be sure a face-to-face encounter is truly needed. Many folks are doing business well—and cheaply—using webcams from the low-cost comfort of their established business place. For buying trips, and that sort of travel, try to line up as many stops as possible to make every trip yield the highest return for your travel expense.

5. Turn off the lights, turn off equipment and adjust the thermostat. Wherever you do your work, look for those energy drains that cost you hundreds of needless dollars each year. Just as you seek to make your home energy efficient, do the same where you conduct your business. Turn off lights when they’re not needed and look for electronics and appliances that perpetually glow, even when you’re not working. Also see about adjusting your thermostat a degree or two. For every degree you adjust the air temperature, you can save 2 percent or 3 percent in utility costs.

Decide to save today

While the foregoing tips might seem too simple to have a measurable impact, the fact is their simplicity is why many business owners constantly overlook the savings opportunities. Yes, the suggested actions are simple, and that’s why you can implement them today. Review your business expenses and try these expense-reducing approaches, then watch your expenses shrink overnight.

About the author

Dennis L. Prince
Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay...and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues. Opinions expressed here may not be shared by The Online Seller and/or its principals.

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