Your business costs can change dramatically over the months. Your vendors may boost their prices, you may need to spend more on tools, software, employees, and more. Evaluating your business costs, at least every six months, will keep you aware of how your costs are changing over time and what you can do to manage them.

Eliminate Unnecessary Expenses

Chances are that your business has accumulated some unnecessary costs over time, or you are paying for things that you may no longer need. For example, you may have tried out some software a few months ago that you are not using, but still paying for. Make a list of all of your costs and identify and eliminate unnecessary expenses. This can reduce the things that you need to pay for, more than you realize.

Reduce Supply Costs

The cost of your supplies can dramatically impact your profits. Consistently be on the lookout for suppliers who can give you a good deal, and ask for discounts. Some suppliers will reward you for being a good customer and paying on time. You can also collaborate with other business owners to reduce costs.

Evaluate Processes and Equipment

Evaluate your processes and equipment to see if they are as efficient as possible. Maybe you have some obsolete equipment, and it would reduce your output costs to get new equipment. Perhaps you have a process that is taking 40 minutes but could be reduced to 20 minutes. However, be careful not to sacrifice quality when optimizing for time.

Reduce Insurance and Tax Costs

Each year, evaluate your insurance needs with your broker to see where you can cut costs.

For taxes, make sure to keep track of all business expenses, including recording receipts and travel expenses as they happen so that you won’t forget them. This will help you to lower your tax bill. You may need to consult with a tax professional for more advanced tax questions.

Deciding on Your Office Space

Having a physical office space can add a lot to your expenses, so decide whether or not it is really necessary for running your business. For some businesses, having a completely virtual team works well. Others need a physical location or a hybrid model where they have some of their staff work remotely while others work at a physical location. You can also have staff work at a physical location some days of the week, and virtually for other days of the week.

Are you looking to cut business costs and boost profits? Consult with a coach today to get guidance for your business.