8 Simple Ways to Control Small Business Costs

For a small business, cost control is not a luxury. Expenses can spiral out of control quickly and many a vibrant and promising company finds itself on the slippery slope to bankruptcy because it didn’t attend to the simplest of routine expenses. Careful cost consideration will help ensure your new business lives up to its full potential rather than falling victim to an operations oversight.Here are some ideas for ensuring your small business keeps costs under control.1. Know your products and services - When you find that a particular product line or service is not cost-effective, consider redeploying your resources. Ask whether the expense you’re incurring is adding value to the firm. Does it bolster the bottom line? If not, consider cutting back in that area.2. Borrow prudently - It’s a good idea to take on debt only as part of a well-thought-out strategy. In other words, consider all available financing options before signing up for a bank loan or borrowing from other sources.3. Investigate tax savings strategies - Which business entity, you choose can have a significant affect on how much tax you’re paying.  We’re talking about Sole Proprietorships and Partnerships versus Corporations and Limited Liability Companies (LLC). Incorporating your business or forming a Nevada LLC can have tremendous tax benefits for small business owners. 4. Control overhead - How much office space do you need to run your business? How many vehicles are necessary? Are you paying for a Ferrari computer system when a Ford will get you to the destination? Again, the goal is to make your firm efficient while it continues to grow.5. Let your employees help - Often the best ideas for making your company more efficient come from the folks working in the back office or on the factory floor. Let staff know your objectives and provide an environment that rewards innovation and encourages efficiency.6. Limit your risk - Law suits against small businesses are not uncommon and are often financially devastating. You can immediately limit your risk by incorporating your business or forming a LLC.  These two business structures will ensure that your personal and business assets are separated from business operations and protected from legal liability. 7. Don’t slash costs indiscriminately - Making across-the-board cuts is seldom the best way to attack bloated expenses. You may be cutting muscle — costs that contribute to revenue — instead of fat. Be selective.8. Monitor costs constantly - Even if you’ve just pulled your business from the doldrums, continue to track costs and look for new ways to make your processes more efficient. It’s important to maintain an attitude of thrift in yourself and your employees. Some owners employ internal auditors; others walk the factory floor or visit branch offices. The goal is to control costs while your business is growing — not an easy task to perform.