What are overhead costs? Those are the things you pay for so that you can do business. It includes rent, salaries, taxes, marketing, office supplies, cleaning service, equipment upkeep, utilities, travel, convention expenses – in short, everything that is not directly billed to your customers. Minimizing these costs allows you to better allocate funds in your budget. For example, the $5,000 you saved per year by making a few tiny changes could go to buying more online ads to get acquire customers or to a raise for your hard working receptionist. Watching your pennies, especially in things that compound, will add major dollars to your bottom line. Knowing where your money is going can also help when looking for small business funding.
1. Look at Your Subscriptions and Interest Rate Charges
When's the last time you actually fine-toothed your credit card statements or bank accounts? You just might be surprised what subscription services you are paying for and not using. The national average is 10 monthly subscriptions. Since service subscriptions can run from the tens to hundreds of dollars each month, it's worth a look to see what is no longer serving you.
While you are there, look for service fees and interest rate charges. Some companies will give you refunds of these charges if you ask. Another option is to do a little homework, compare these rates to what other companies are charging and ask for your current company to match. Lowering your interest rate by a few percentage points might not seem like much, but if you are carrying high balances, it can mean a reduction of thousands of dollars every year.
This strategy holds for most of the services you pay for. Did you know that your utility company can change your rate without knowledge? You might not be paying what you signed up for at the start. Dependent on your location, you might be able to get a lower price from your light or gas company with a short phone call. Even if you don't change providers, comparing prices is a great way to make sure you are making the best money choices for website hosting, credit card and invoice processing, and other needed services.
2. Work Your Military and Veteran Benefits
You put a lot on the line in your military career. Why not seek out resources that are made just for you? As a veteran-owned small business, you have options for services and goods that can be at a lower price than those offered to the civilian population. One area to look at is small business loans for veterans. You can usually get a better interest rate and borrowing terms than you can find on the general market. But don't stop with a small business loan or a business line of credit. You can get discounts on credit card processing, legal advice, and much more.
3. Ask Your Uncle Sam about Business Tax Deductions
Are you taking advantage of all the business tax deductions and write-offs that are available to your business? Not only are there a new slew of national tax laws that can assist small business, but your state may also have benefits for activities. Do some online research to learn more and then consult with your lawyer or accountant about what's right for your situation.
Want to learn more about the new tax laws? Check out 5 Things All Vet-Owned Small Businesses Need to Know about the New Tax Laws
4. Reduce Your Rental Fee and Explore a Coworking Space
If you rent space for offices, manufacturing or storage, you might think that's a fixed expense. With today's share economy, there is a whole slew of options available, if you are willing to rub elbows with other companies. Coworking spaces can be a great option for smaller businesses. They offer fixed or open seating, private meeting rooms or private office suites that can be yours with perks and benefits that you might not get with a traditional rental arrangement, such as a receptionist, free coffee and snacks, a yoga instructor and access to technology at no extra cost.
Manufacturers can offer their equipment to other companies for use, for a smaller fee than purchasing or fully renting the machinery. This can be an ideal solution for printers, allowing you access when you need it and saving on a monthly rental fee. If you have inventory, looking into sharing a warehouse can result in saving up to 50% in fees every month.
5. Become A Smarter Shopper for Everyday Things
Are you paying the best prices for supplies? There are many services that will give you a discount for bulk purchases or subscription purchases. Amazon.com, Office Depot and many other companies will allow you to schedule regular deliveries of paper, pens, cleaning products and other office needs with a nice percentage off for guaranteed purchases.
6. Don't Do It All Alone – Outsource Tasks
What do you and your team actually do every day? I'm willing to bet that if you wrote down every daily task, you would find areas that waste time and money when you do them yourself. One easy way to figure out if a task is a time/money eater: figure out how much money you make an hour when you do your thing. Then, determine how many hours takes for you to do a non-money making task and multiply that by your hourly rate. Do a quick search to see how much it would cost to have someone else do the task. If it's less than it costs for you to do it, then it makes sense to outsource that task.
What kind of work can you outsource? Almost everything, from graphic design to answering the phones to writing emails. Check out websites like Upwork and Fiverr to find remote help and connect with local temp agencies and chambers of commerce to find someone locally.
7. Ensure You Have Capital When You Need It
It can be tempting to rely on fast, short-term business loans to fix your immediate needs. But as many veteran small business owners say, the best time to get small business funding is when you don't need it. The Patriot Express® Line of Credit is a great business financing solution to have in place to ensure you're getting the best rate. If your business is seasonal or you're looking to scale, a business line of credit may be what you're looking for. There's no cost to keep it and you can draw when you need it.
Does your business work on contracts? Are you contract rich, but cash flow poor? Consider an alternate form of small business funding, such as with a factoring company. A factoring company works with commercial or government contracts and allows you to borrow money from the value of your current contracts at a small fee. It's a great way to make sure you have the resources you need to deliver on your obligations.
Know the Basics of Small Business Financing
Now that you have an idea of how to save money in your business, make sure you understand the Basics of Small Business Financing with our ebook. It will show you how to determine where your company stands financially if now is the right time to seek financing, the types of financing that are available to you and how to prepare for the process. Click here to download the ebook now.
This communication is provided for informational purposes only. It is not intended to be an advertisement, a solicitation, or constitute professional advice, including legal, financial, or tax advice, nor is StreetShares providing advice on any particular situation. This is not an offer of credit. All applications are subject to approval, no guarantee of funding.