Running a business can be a challenge, and ever more so when times are hard. But the good news is that as a business owner, you can take positive steps to curb spending or increase the chances the time and money you invest pays off. Here are some tips to help you keep a tight rein on spending during an economic downturn.
Take full advantage of tax deductions
In the rush to get taxes filed and off the to-do list, some business owners overlook deductions that could save hundreds or even thousands of dollars. For example, if you run a home-based business with eligible office space, you probably know you can deduct a percentage of your rent or mortgage interest. But did you know you can also deduct a portion of your lawn care or house-cleaning bill? The IRS website has a list of eligible deductions.
Be the early bird at the bank
If you have payments to deposit, make sure you do it as soon as possible, and preferably early in the day. Generally, banks credit deposits that are made before noon to the day you deposited the money; those deposited later are credited the next day. Start earning interest on your money as soon as possible. It may seem like a small thing, but pennies add up to dollars quickly.
Let suppliers compete for your business
You aren't the only business owner anxious to keep valued clients - chances are, your suppliers want to keep you on board. Shop around for prices and ask your suppliers to match the better deals you find. If you're bidding services out, cast a wide net - it could pay off in increased savings.
One primary worry many business owners contend with during tight times is what to do about staffing. Hiring costs a lot of money, and downsizing can be expensive too, not to mention demoralizing ? both to employees who are let go and to remaining staff and the business owner. Those are some of the many reasons more and more employers are turning to independent contractors or temporary help to round out staff. In most cases, when you hire independent contractors, you don't have to worry about providing a benefits package or withholding taxes. And you can call on your contract workforce only when needed.
Make sure you're spending time and money wisely
One mistake many business owners make is not keeping a close eye on how much time and money they spend pursuing customers or performing work. It's always important to know what benefit you're deriving from your efforts, but when times are tight, it's more important than ever. Time spent analyzing how much of a return you are getting on your efforts is time well spent. You may find that some clients or prospects are not profitable enough to justify the expense. By focusing on your core market, you'll receive a better return.
Every challenge represents an opportunity, and an economic downturn is no exception. Consider these money-saving suggestions to help your business thrive during hard times. You may find that they work well when the economy improves.