As a small-business owner, you probably have a good idea of what your company’s month-to-month expenses are. But have you taken the time to evaluate exactly where your cash is going? Doing so could make a big difference to your bottom line.
For starters, scrutinizing your expenses on a periodic basis will help you keep tabs on your budget and reduce your company’s risk of failure. It can also reveal areas where cuts can be made, thus saving you money.
Here are four areas in which your business may be leaking cash — and how to reduce those expenses.
1. Events — Attending trade shows and industry conferences can afford you many opportunities to learn and to network. These events, however, are often costly when you add up registration fees, airfare, and lodging and meal expenses, notes Erica Wiley, co-founder and president of ProfitGeeks, a marketing agency.
Before you sign up for any event, consider its benefits: Will you learn about a topic that’s vital to your company’s growth? How many of the other attendees may represent potential customers or partners in the market you’re targeting? Being intentional about the events you attend will save costs and increase the number of leads you can obtain and convert, Wiley says.
2. Insurance — Your business most likely needs some basic insurance and possibly additional policies to cover risks. If you haven’t evaluated what you’re paying for your business insurance policies in the past year or two, now’s the time to do so. Although reducing the amount of coverage you carry may not be an option, you may be able to save money on the overall price of your policies by shopping around.
Contact insurance agents in your area and ask whether a better price is available. Check online for quotes that fit your insurance needs. Before signing up for a cheaper option, check the insurance company’s financial information (provided by the National Association of Insurance Commissioners) to make sure you select a reputable agency.
3. Office space and equipment — If you rent an office that’s bigger than what you need, consider relocating to a smaller, less expensive location. You could even share an office with another business.
Meanwhile, even if going completely paperless is impossible, you may be able to decrease the amount of paper and ink your company regularly uses. Consider storing more files digitally or making office communication strictly electronic.
4. Marketing — Consider moving more of your marketing efforts online. For instance, do you send out a monthly bulletin to clients through the mail? Try replacing the print edition with an email newsletter.
If you currently pay for press releases or other advertising services, think about taking on those activities yourself or having an employee oversee them. Or seek out a colleague you can barter with: Setting up a trade may be as simple as offering one of your services in exchange for marketing assistance.