How to Cut Costs and Increase Cash Flow

Small changes and cuts made now can not only increase cash flow, but can prevent you from having to make larger cuts later on. The following are a few ways you might consider cutting costs when it comes to the profitability of your business:

• Consider telecommuting options for some or all of your employees. Whether it’s for one day a week or full-time, telecommuting is a surefire way to cut costs when it comes to office building expenses. If you want to have your employees work full-time from home, you don’t have to worry about an office space, however if you want to maintain and office space but have employees work part-time from home, you might consider renting out your office space on the days that it is not in use.
• Networking is definitely a smart marketing strategy; however be wise in your business trip expenditures. If a conference or business trip isn’t going to directly generate revenue for your company, consider not attending. If you do end up attending, avoid spending unnecessary company money on fancy hotels and meals.
• Be smart when it comes to the use of electricity and fuel costs. While it may seem like only a few dollars here and there, it adds up. Keep your thermostat set higher in the summer and lower in the winter to save money on your utilities. When you’re on the road, slow down and use a GPS to ensure that you’re not wasting gasoline or time getting lost.
• Reduce overhead by settting up a reliable inventory system that doesn’t require you to have too much or too little inventory at a given time, which can cause your company unnecessary expenses. Talk to your suppliers about a discount for paying for inventory within a short amount of time. Some companies will offer a 2% discount incentive if paid in full within 7-10 days.
• Bartering isn’t an outdated practice, talk to businesses that you often do work with and find out if they’d be willing to trade goods in return for your services to reduce cash expenditures.
• Depending on the size of your business, there could be multiple opportunities for tax deductions when it comes to small business credits, new equipment purchases, office vehicles, and other expenditures.