Besides the initial costs involved in launching a small business, entrepreneurs also need to be aware of the many ongoing costs that come with business ownership. Keeping a business running involves a number of expenses that can cut into your bottom line. From federal taxes to professional service fees, make sure you’re prepared to cover these costs so you can keep your cash flow consistent. The Kaufman Economic Development Corporation shares some common ongoing costs to expect as well as some steps you can take to save money!
Taxes, Permits, and Licenses
In order to remain in compliance with laws and regulations, you must pay taxes and maintain the appropriate permits and licenses.
- Determine whether structuring your business as a sole proprietorship or an LLC would save you more money in taxes and ongoing costs.
- Learn tips and tricks to help you save money on small business taxes.
- Remember that ensuring you have the right permits and licenses will help you save money down the line.
Building and Utility Costs
On top of paying rent or mortgage fees for your business space, you also have to plan for ongoing utility costs as well as maintenance and repairs.
- If possible, consider launching your business from home to reduce your building costs.
- If you must rent a space, try renegotiating your lease terms.
- Look for ways to control your utility costs, like conducting an energy audit or maximizing your use of natural daylight.
Wages and Professional Fees
There are a number of steps you can take to save money on payroll without asking employees to take a pay cut or give up their benefits.
- As full-time employees leave your business, replace them with part-time workers who don’t receive benefits.
- Hire freelancers to tackle one-off jobs.
- Set up an internship program with a local college.
Advertising costs will likely account for a large amount of your regular spending. Look for cheap ways to market your business without sacrificing sales.
- Outsource your marketing to professionals who have a proven track record.
- Spend money on high-ROI marketing strategies like social media and email.
- You can create a Facebook ad using a free ad maker and customize your ad to your brand.
- Have customers do your marketing for you with referral programs.
Too many small businesses reach a state of bankruptcy before they have a chance to get off the ground. When you run a small business, every cent counts. Shaving just a couple of dollars off a monthly expense can make a difference in your bottom line, so don’t overlook any opportunities to cut those ongoing costs!