5 Common Business Expenses You Can Target Right Now
Plan your expenses and deductions strategically each year
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Maintain accurate and organized financial records for easy reporting
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Personalized Marketing: AI helps in analyzing customer data to create personalized marketing campaigns
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Use accounting and tax software to make management easier
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Being a smart business owner is all about sweating the details, and this is even more true of new business owners. Those first few months are crucial, and if you don’t take some time to trim the fat in some commonly bloated spending areas, you’re going to struggle.
Here are some business expenses to target right away.
Equipment and Office Supplies
If you run a brick-and-mortar shop, there’s a high chance that you’ll see yourself spending way more than you thought to stock it. Office supplies, equipment, and furniture are all major upfront costs. For supplies, your best bet is to look for electronic deals. For equipment, buying refurbished is a great way to shave off the cost. eBay is also a good place to look for deals, but take time to do a little research so you can make sure you know what you’re doing.
Taxes
That first year of paying business taxes can be rough for a new business. The biggest way to save money during tax season is to get a firm grasp on your possible business deductions, of which there are plenty. These include, but are not limited to, vehicle expenses, employee benefits, self-employed health deductions, and more. Another deduction? Tax preparation fees. That’s why it’s smart and economical to hire someone to help you with your first-year business taxes.
Energy costs
Your office space will likely use more energy than you ever dreamed, and those gas and electric bills begin to add up when you’re trying to get a business off the ground. If you don’t want energy bills eating into your profits, think about ways to reduce your environmental footprint.
One idea is automation. Sure, a smart thermostat may be a little more upfront, but in the long run, it can save you hundreds on heating and cooling costs (in a larger space, especially). Another great idea is to install motion-sensing and timed lighting options and make sure all of your equipment is timed to turn off when you’re not there.
Software
The average cost of Business Intelligence Software is around $3,000 a year. When you add on the additional costs of licensing other types of software you need to run smoothly (accounting, payroll, data processing, etc), the costs can skyrocket. You need to know that there are plenty of open-source software packages out there that cost fractions of that – many of which are free to use. Through a combination of free business apps and business software, you can reduce your total software costs to near zero. Keep in mind that when you’re dealing with business software, it’s important to take steps to protect and secure your data.
Your Entire Office Space
Have you ever thought about just not having a physical office? For some companies, this simply isn’t a feasible idea. But for many, the idea of ditching the brick-and-mortar business altogether, while scary, can actually be the best option. For businesses that rely heavily on computer work and conferencing and less on day-to-day in-house office tasks, telecommuting can be a wallet-saver. Imagine not paying the overhead of a building or all the things inside of it? Your only real “office” expenses will be the computers you give your employees. Video conferencing software can be free or paid; providers like Google, Zoom and Microsoft offer various options — either way, it’ll be cheaper than rent.
Think about it this way: any business expenses that you cut can give you room to spend more on things that boost your new business like paying your employees more, marketing, and making a better product/providing a better service. Start trimming the fat as early as you can. Taking a fine comb over everyday business expenses is a good habit to develop early on.
We Can Help You Save
From handling your taxes to creating detailed financial reports, Crunch Consulting can help you cut back on your business expenses. Contact us to schedule an appointment a financial advisor.
