The cost of doing business is on the rise. Many business owners today are working harder to make less that they did in years past. Below are 5 common expenses that if not managed properly can really eat profits.
Insurance policies are an important part of doing business. Workers’ Comp, Business Liabiliy, & Auto Insurance are usually requirements to do business in South Carolina. With the rising costs of health insurance many businesses are choosing to opt out of providing health plans to their employees. Keep in mind that unless you have a certain number of employees health insurance is optional to offer your employees. Also there are many ways to structure a program to help lower the costs and still be able to provide a great benefit to those you depend on. It’s a good idea to contact your agents for all your policies periodically to see what creative ways you can save on your monthly insurance costs.
2.Utilites and Unused Space
Depending on the type of building you have and when it was built there could be many options to help improve your utility bills. Businesses now are installing automatic light switches, smart HVAC monitoring devices, dehumidifiers and many other gadgets that can improve the bottom line. Another often overlooked hidden cost is having a facility that is too large for the amount of revenue you are producing. It’s seldom a good idea to move your business, especially in a retail setting, but if lease or mortgage costs are eating your profitability it may be a good time to move.
3. Credit Card Fees
When cash flow fluctuates many business owners will carry a balance on a credit card to pay expenses while they wait to get paid. Many see this practice as a necessary evil to fund the ebbs and flows of their business. This is ultimately a flawed business practice. With interest charges having spiked in recent years it has become imperative for business owners to cut the cord on funding their businesses with credit cards. Keep in mind there are other more favorable ways to have revolving credit including a revolving line of credit against real estate holdings. This type of credit is usually much less expensive, allowing you to keep more of your profits in the business coffers.
4. Office Supplies
Have you seen the prices on printer ink? Office supplies are necessary but make sure you are tracking the expenses and finding the best prices for your supplies. Large orders can be made from online retailers that will generally save you 50% or more vs big box store prices like Staples and Office Depot. If you find that you’re stopping by too often to get a few things to stock the office, create an inventory list of supplies and order large quantities online to save money.
5. Professional Services
Attorneys, IT Services, & Accountants are all necessary for doing business. Are you paying retainers for their services? If so make sure you are getting a great value for you money. If you seldom need contracts reviewed you may be better off just paying the hourly rate when the time comes rather than an ongoing retainer. Its usually a good idea to look at your professional services contracts once per year to ensure you are getting a maximum value for your money.