When you run your own business, it can seem like costs just keep piling up. You get nickel and dimed everywhere, and you wonder how you can manage these costs effectively.
If you cannot manage your costs, then you risk the ability of your business to stay open and profitable. 29% of businesses fail because they run out of cash. If you let your spending get out of control, this can happen to your business, leaving you with nothing to show for your hard work.
However, it takes more than just cutting random expense in hopes of keeping your overhead small. After all, you cannot cut all your expenses, but there are ways to manage your business overhead that will allow your business to function effectively without breaking your budget.
Keep reading to learn about five things you can do to cut costs without sacrificing the quality of your products and services.
1. Go Paperless
How much money do you spend every month on paper and ink? If you sit down and do the math, it can quickly add up. In the past, businesses had no choice but to pay for these items, because you have to be able to keep records and maintain the accounting related to your business. Today, technology has changed the landscape, allowing these costs to be eliminated by means of digital record keeping and cloud storage.
That means your staff can easily work on documents without printing endless number of drafts, while still tracking changes overtime.
You do not need to clutter your office up with paper anymore. When your files are online, you can access them anywhere and keep them in order. Plus, it protects your files because you do not have only one hard copy.
If you are looking to go paperless, a working capital loan can help you make that initial investment to get your files transferred to searchable digital files and loaded onto the cloud.
2. Get a Good Accountant
If finance isn’t your area of expertise, you might have problems managing your cash flow.
It might cost more in the short-term, but a good accountant can find areas in your finances where you can cut costs or combine administration tasks to reduce overhead costs. Plus, your accountant can help you to see areas where you can increase your cash flow. They can assist you in determining your slow months and then suggest working capital funding options to even out your cash flow during those times.
An accountant will also do more for you then manage your books. When tax time comes, they will be able to find deductions for you and keep you from making mistakes that cost you penalties. These finds can more than make up for the cost of an accountant.
3. Allow Remote Work
The internet has changed the way we do business. If your business is growing, then you might be tempted to get a bigger office to bring more workers in-house.
Why add the extra expense of expensive office space when you can let people work from home? The internet gives people the freedom to work from home and saves you the cost of additional office space, utilities, and more.
Many productivity and communication tools make working online easy. Before you get a bigger space, give remote working a chance. Today, technology gives you a variety of options, including contract employees. You may be able to save payroll and tax costs by simply opting for contract or freelance workers to assist in expanding your business.
While there may be an initial investment of technology, which can be addressed using working capital funds, the long-term savings for your business is worth it. Plus, having remote workers can allow you to grow your workforce during the busy season without dramatically increasing your overhead.
4. Ditch Your Landline
Have a separate landline is not required anymore now that we have high-speed internet. You can make use of internet services for your phone needs, especially since most businesses today need the internet as part of their operations. Skype and Google Voice allow you to make calls straight from your computer.
If you have a larger workforce and have more needs, look into VoIP services in your area. These services may be able to beat out the cost of landline service and give you more flexibility in terms of designing your phone options. For instance, you might have multiple people working from home, but when clients call into one main number, they can access all the departments of your business, no matter where they are located.
Working capital loans can help you make the initial investment in a VoIP phone system, allowing you to upgrade your technology to take advantage of the cost savings and the convenience of this technology.
5. Upgrade Your Technology
One of the realities of running a business is that you are going to need technology. Still, there are significant costs associated with upgrading your technology, especially if you are looking to take advantage of AI software to eliminate the need for employees to handle repetitive and time-consuming tasks.
Using a working capital loan, you can make an investment in your technology platform that can increase your productivity. In the long run, you are going to make your business more profitable by investing in the ability for your business to grow.
Make Sure You Manage Your Business Overhead
While you cannot get away with having some overhead in your business, you should still do everything possible to lower your operating costs.
You do not always have to spend a lot of money to make money. Make sure you stay optimized to profit more. When you do, you can put your profit to work where it matters and successfully grow your business.
These points demonstrate that strategic investments of working capital can save you in overhead costs over the long run. So, are you ready to take on capital to expand your business operations? We can help! Contact us to learn what your loan options are.
Combining a high level of personalized service with a cutting-edge lending platform, Formula Funding delivers an unparalleled banking alternative. We offer a fast and efficient option to get your business the critical funding it needs without the red tape. We work with all credit grades, tax liens, judgments, and charge-offs – something unheard of at a traditional bank. Since 2010 over 15,000 small business owners have used our funding sources to grow and expand.