If you own your own business, you’ve likely come up against a common problem: most companies operate on narrow margins. Maybe it’s the pennies per item of profit most grocery stores make on stock, or the high cost of overhead in professional settings – but whatever the industry, such financial difficulties are often what force small businesses to shut down. Relative to income, the operating costs just aren’t sustainable, and that may be because your business is overspending in preventable ways.
While some costs are relatively fixed, a surprising number of business expenses are negotiable. There are also those business expenses that skyrocket simply because no one is monitoring them.
As a business owner, you need to pay attention to these 4 areas, each of which commonly plays a role in driving excess business costs, and then you need to find a way to trim the fat.
Audit Your Tech
Technology is one of the most expensive elements of running a business, and it’s easy to get caught up in the race to have the most advanced equipment and software, even though that’s not necessary. Before you make any additional purchases, audit your technology stack, including both new equipment purchases and subscription services, like software. Are you duplicating functions or paying for tools you don’t regularly use? Drop those and set a schedule for upgrading equipment so that you can budget for it appropriately.
Trim Telecom Costs
Telecom services are, in a sense, non-negotiable – your business has to have internet and phone service in order to operate, and that on its own isn’t a problem. No, the problem is that with so many telecom services and plans available, many businesses end up overpaying for services – and worse, most feel overwhelmed by the amount of information they’d have to navigate to actually save money, so they keep letting it disappear down the drain. So, what should you do?
One way for your business to stop overspending on telecom services is by partnering with a company like P3 Cost Analysts, skillful negotiators who can audit your telecom bills and help your business find more appropriate, affordable services. It doesn’t make sense for business leadership, or even IT professionals, to learn the finer points of telecom service offerings when there are already professionals who can offer that support.
Insurance costs money, it’s true. But do you know what costs more money? Trying to rebuild your business from nothing in the event of an accident, or trying to pay for a lawsuit out of your own pocket. As a business owner, you need insurance. If you’re going without, you’re surely overspending in other areas, or at least walking a very dangerous line.
Look Twice At Travel
Business travel is a valuable part of networking and building client connections. It’s also expensive, but that doesn’t mean you need to drop the trips entirely. Rather, if you want to stop overspending on business travel, your need to create a central way for managing itineraries and budgets. You also need to set clear guidelines about appropriate business expenses, though without leaving individuals in the field hamstrung and potentially alienating clients. Take some time to analyze past travel, look for places where travel spending got out of control, and then reign those expenses in going forward.
When addressing the problem of overspending within the business context, rethinking your budget won’t solve the problem. Rather, it all comes down to auditing your expenses and cutting costs in a functional way. You’re almost certainly overspending somewhere, but only a close examination will reveal the roots of the problem.