Businesses come to The Commercial Finance Group for a number of reasons. In some cases, businesses are healthy and thriving and are seeking greater flexibility for their operational plans without the restrictive covenants that often accompany traditional bank loans. For others, they are relying on our small business lending services to afford overhead costs and day-to-day expenses.
For the latter of those options, they are also likely trying to find ways to cut down on costs. While scaling back is never easy, there are always ways to save money. While you work with us through our factoring services or with asset-based loans, take into consideration some of the following areas to cut costs.
How To Cut Business Costs
Find Cheaper Office Space
Unless you are working out of your garage, there will almost always be a cheaper office space option. While it isn’t fun or glamorous to scale back on space or move to a less than desirable location, it may be what you need to keep your business afloat. Consider having certain roles work remotely or even renegotiate the terms of your lease with your landlord.
Forego Unnecessary Spending
If you look hard enough, you’ll always find some unnecessary spending within your company. Whether it is printing a weekly company newsletter that could be emailed for free, sending out mail flyers without any noticeable return on investment, or traveling to do business that could be done over a video chat, you will find big and small ways to reduce spending when you look at the numbers and think a little bit outside of the box.
Barter With Suppliers
Most suppliers will be willing to drop prices before they lose you as a client. When working with suppliers, don’t be afraid to push back on their quotes to get better rates or negotiate the terms of your contract.
Hire Seasonal Workers
If your company has seasonal lulls, consider keeping a primary staff year-round and hiring temporary employees to get through the seasonal rush. This might seem more expensive when you have to actually employ a large number of new workers, but scaling back employment during slow times will make up for the influx.
Cut Benefits And Perks
Cutting employee benefits is something that no company wants to do, and it is important to remember that there is a thin line between reducing some perks and scaring your employees away to other companies. Start with cutting more trivial benefits such as gym memberships or putting a cap your 401(K) matching.
Additionally, it could be beneficial to scale back on employee perks such as free food, holiday parties, and company cars. While these things are important for company morale, if the choice is between cutting perks and cutting employees, most will agree that it is better to do the former.
Thin Equipment
If it’s a slow time for your business, take a hard look at the equipment and machinery you own or lease. What isn’t being used? What can be sold? If you are leasing equipment, work with the leasing company to renegotiate the terms or cancel the lease entirely. If your company is at risk of truly failing without the cooperation of the leasing company, they might be willing to work with you. If you own equipment that you don’t absolutely need to operate, sell it. You can always repurchase equipment when your business has found its footing.
One thing to keep in mind while doing this, however, is it might reduce the amount you can borrow through asset-based lending. If you currently have asset-based loans, be sure to notify your lender before selling any expensive equipment.
Use The Cloud
Using a cloud service for your business is significantly less expensive than owning and upkeeping your own servers and hardware. It also often eliminates the need for an internal IT team and, because most cloud services automatically back up your date, the likelihood of losing important documents is reduced.
Capitalize On Insurance Discounts
It goes without saying that your business should not eliminate insurance entirely. However, there are a lot of ways to save money on insurance costs. If you would be able to afford a higher deductible should you need to, consider lowering your premiums. Eliminate unnecessary or luxury insurance policies. Find ways to capitalize on insurance discounts by increasing the safety of your facilities and making your company less of a risk for the insurance company.
Keep Good Tax Habits
Tax season is a time of year when too many businesses pay too much in taxes. You can make tax season easier by creating and keeping good tax habits throughout the year such as organizing and tracking all business expenses, recording any business-related mileage and other potential write-offs, and ensuring you keep your business and personal finances completely separate. Take advantage of all available deductions and, if needed, work with a tax expert to help you find the best tax solutions.
Choose A Reliable Company For Working Capital Solutions
When times are tough and you need a source of working capital to gain respite from cash flow problems, be sure you are working with a reputable company. The Commercial Finance Group has been providing working capital solutions to clients for more than 40 years and our track record of success speaks for itself.
Our wealth of experience and flexible approach to small business lending enables us to provide cash flow solutions that other lenders cannot, ensuring that we are able to meet your company’s needs.
If cutting costs isn’t cutting it to solve cash flow problems, consider a better solution. Contact The Commercial Finance Group today to learn more about our asset-based lending and factoring company can help you.
