If you were to do a quick search online as to how to cut business expenses you would inevitably find things such as these 7. However, these are certainly undesirable and I will show you a better alternative for each; plus 5 overlooked options which business owners think they are doing (or are having done by their “people”; professionals like CPAs and tax professionals) but are not.
1. Eliminate Discretionary Spending. Hello? Discretionary spending is spending that sometimes appears to be unnecessary but isn’t; and who decides what is “discretionary”? That’s a rhetoric question as we know it is the owner’s responsibility but it is also his or her responsibility to have happy employees and when so-called discretionary spending is cut that means raises, perks, and parties; all which are moral boosters. Work to not have to consider any type of cuts if you can help it and then only very carefully. When a business is run appropriately, hopefully, it won’t come to this.
2. Buy more carefully. This is a good point because it is being pro-active because it is progressively thinking as you are moving forward in your business growth when you are buying. As a business owner, you may want to do most of the buying yourself or oversee everything over $100 to $500 in your business. You don’t want to micro-manage but you also don’t want to authorize someone to make purchases who can’t manage their own household budget and, it’s always easier to spend someone else’s money; just don’t let it be yours.
3. Look for a Cheaper Credit Card Processing Service. Come on, really? First of all, you don’t have to “look” for them; you are probably being approached on a weekly or monthly basis by someone who “has a better deal”. I simply suggest that you have an audit completed (and continually maintained) to be sure you are not getting charged for fees you need not be. (I’m trying to be “nice” here).
4. Stop Paying for Equipment You Don’t Need. This I agree with. You should also quit paying for office space, storage, and other things you don’t need. Look at your situation and look at internet options, leasing options, and deleting processes and getting rid of equipment which you can “hire out” to have done if you use it infrequently.
5. Renegotiate Your Lease, or Move. Harsh and “heavy duty” decision here, but business is business. However, when you move consider “all” the costs; much of which you may not think about such as all the costs to change stationary and signage and more importantly all the marketing necessary to get your new location in the minds and habits of your customers.
6. Sublet Unneeded Space. This is a great idea, but with a few caveats. If you have unneeded storage space, by all means, get someone to share it. You can also share your office space but if you do, you should strongly consider it to be a business which compliments yours; such as if your business is “wedding” then a “photography” studio in your building works well. Just about any non-competing business would work well but why not have your building a “one-stop” shop for your customer. This may go without saying but be sure that your tenant is solvent and be sure they understand that you are a business and not a charity; rent needs to be paid on time; you may even want to have a third party handle the leasing arrangements so you are not “directly” involved.
7. Cut Employee Perks. I don’t agree with this one at all. You may want to be very careful in creating and implementing new perks but once in place, this would be one very last option to do. Put yourself in other's shoes. If you had put yourself in your customer’s shoes and understood them you probably wouldn’t even need to consider “cutting” anything and when you put yourself in your employee’s shoes you would know that they would not want to work for a business which is taking away things. If it means keeping your doors open, talk with your employees and explain that this will be for a short time until things get better but try very hard not to have to do this.
As I mentioned, I found this list of 7 things on the Internet and then gave you my take on all of them. Some are OK, some good and some are very bad and if you have to choose them, I would suggest that you help your employee to transition into a job elsewhere.
As promised, now I'll offer 5 things which you may not be doing.
Actually, I know you are most likely not doing them because we have the statistics. You are simply not aware of them or you think that you financial advisor is taking care of them.
Here is one way you can tell if your tax professionals are doing this for you. Think back to tax time. Do you remember getting a check for over $100K? I’m thinking that you would remember that.
Your accountant’s job is to be sure that your taxes are being done correctly and legally; not to bring you money. They may save you money but most do not know what is available, or what I am about to tell you they may have known about but prior to 5 or 10 years ago or even more recently, with all the fees involved, it wasn’t worth it for the business. Now things have changed. With advances in technology it IS worth it; even for the small business operator.
WOTC credits have been around for years but they used to be only for veterans and ex-cons. Now your business can earn up to $9600 per every person you hire. That would go pretty far in creating revenue in any sized business.
Have you made any property improvements or put up new buildings? You are probably owed monies here. (This is where business owners mistakenly think that this is being taken care of already. Remember that $100K check I asked you about?).
As a business tax and expense reduction advisor, I offer other ways to save your business money. Another is having an ongoing credit card processing monthly audit to cut your fees; many times up to 21%; that my friend can be a big chunk of change. We don’t advocate changing credit card merchants; just be “smart” in watching those fees!
I think you’ll agree that it is foolish to continue to pay fees and not get the breaks you and your business are entitled; especially when it is tough enough to conduct business and when it is so easy to have our service check into this for you. If we do not find you savings or reductions, you pay us nothing!
It takes less than 30 minutes to run the numbers for you. If you are located within 100 miles or so of Duluth MN/Superior WI I will personally visit or send someone from our team. If your business is located anywhere in our 50 states, we can do a screen share. The same technology which makes it easier to find and get you these tax incentives and expense reductions are the same that makes it easy for me to assist you.
To see your estimated savings use the following links. Remember that these are estimates only and do not cover all five areas where I can help. We’ll need to meet to determine all we can do.
Why put this off any longer? We’ve worked with too many business owners who have wished they had acted 5 and 10 years ago. Quit missing out on what you are entitled to.
Contact us today!
Terry (Ter) Scott
Senior Advisor
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