LawFuel contributing writer Norma Harris
When you’re running your own New York business, reducing costs is an important consideration. You want to maximize your profits and spend as little as necessary to operate your business. Making the right choices on which cuts to make and how to go about getting yourself organized involves some important considerations.
Below are some tips for reducing your costs and saving money for your NY business.
1. Review Your Contracts
Contracts are an essential part of managing your business. Looking at these contracts can help reduce your operating costs.
Consider your office space as a first step. The commercial real estate market is soft right now, with companies not renewing leases or reducing their corporate footprint.
The result of these actions is a large inventory with lower demand for square feet. Don’t sign long-term leases and negotiate to lower your monthly rent.
You should also let your vendors know that you’re shopping around. If you’re a loyal and regular customer, you may be able to cut a deal and secure better pricing.
2. Leverage Social Media
If you’re looking to broaden your reach, you must invest in social media. Start by determining which platforms your customers and potential customers are using.
Whether it’s Facebook, Instagram, X, LinkedIn, TikTok, YouTube or a combination of those and others, spend the time to establish and build your presence.
Having a strong, reliable presence on social media means developing and posting content that’s relevant to your customers and adds value to them by solving problems and positioning your company as an expert.
You can invest in advertising on social media platforms, too, with targeted matching that puts your content and ads in front of users with the demographics you choose.
3. Assess Your Insurance Coverage
Insurance rates and coverage often changes each year. It’s a smart idea to consult with an insurance agent to see if they are getting the coverage they need at the best possible rates.
By letting your insurance coverage renew automatically, you are leaving potentially thousands of dollars on the table. A review of your insurance coverage can ensure you receive the right coverage while spending less.
There are many ways to reduce your insurance costs, including:
- Bundling policies, much as homeowners often bundle auto and home insurance
- Raising your deductibles
- Valuing property differently
- Assessing previous claims to secure targeted low-cost policies
4. Shop Around for Products and Services
It can be faster to just buy the first version you come across for a product or service you need. But just like it’s important to shop around for personal products and services, your company benefits from spending some time to compare prices and offerings.
Investing just a few minutes in comparison shopping can lead to saving real money on the things you need to run your business.
5. Use Free Software
Every business needs some forms of software to run their business. You’ll need software for your website, browser activity, word processing, spreadsheets and presentations.
While some large, well-known companies offer bundled desktop app software for businesses, they are not the only option. There are free versions of office applications that offer most if not all the same functionality. Especially when you’re just starting your business, using free software can really save.
6. Look at Staff Roles
Payroll is a major expense for many small businesses. You’ll be losing money if you have staff in the wrong roles, doing the wrong work or not doing the work you need.
When you have a vacancy or are thinking about adding additional staff, take the time to assess staff roles and responsibilities. If cash is a major issue, you may need to do this evaluation prior to laying off staff, too.
By looking at what the company needs, the strengths of your existing staff, and what you need going forward, you can reposition your staff, change responsibilities and save money.
7. Focus on Employee Engagement
Be sure you are also considering employee engagement, which is a measure of how connected employees are to the company’s mission, vision and values. Engaged employees believe in the company’s work and reflect that enthusiasm with others.
Maintaining strong employee engagement and morale means your company will:
- Have less staff turnover
- Attract more employees
- Have more efficient employees and teams
- Enjoy better customer relationships
All those benefits save you money.
Strong employee engagement means being transparent in communication, having strong compensation and benefits packages, and listening to your employees.
8. Consider Business Structure
The legal business structure you choose can have a significant impact on your bottom line. Business structures also have a major impact on your tax obligations.
A limited liability company (LLC) is a popular business structure among New York small businesses. In an LLC, business owners have flexibility in how they are taxed. In most cases, an LLC’s revenue, expenses and losses are passed through to the owners’ individual business returns.
An NY LLC can be expensive to file by yourself, which is why many small businesses choose a trusted partner to manage the process of initial and annual filings.
9. Leverage Tax Deductions
The U.S. tax code is designed to help small businesses succeed.
There are many different deductions available at the state level that help reduce your business tax obligations. Among the most common business tax deductions are:
- Startup costs, including advertising, training, market analysis fees, travel expenses and payments to consultants, attorneys and accountants
- Insurance premiums
- Utilities paid in your place of business
- Inventory
- Rent payments
- Purchase and upkeep of company vehicles or mileage accrued if using a personal vehicle
- Office supplies and furniture
- Software
- Travel expenses
- Business meals
- Interest and bank fees
- Salaries and wages
- Advertising and marketing
- Education
Understanding the definitions of each of these expense categories can save you considerably. Be sure to keep receipts and records to ensure you are taking all the allowed expenses.
10. Use Automation and AI Tools
In the past few years, automation and AI have revolutionized business operations.
Automating routine and repetitive tasks can help you to save time, reduce personnel costs and save time. Automation tools can help in reconciling financial documents, sharing data across software apps and generating invoices, to name a few uses.
Artificial intelligence can help save time and money. AI tools, many of which are free, can help you create written and video content, create images and draft letters and emails.
Virtual assistants on your website can help customers seeking help navigating your site, finding information or answering questions.
All these tools should be used with human oversight and review but can help jump-start processes and work.
11. Employ Independent Contractors
The gig economy is a growing part of the workforce. With talented employees located around the world, you can find specialized expertise in multiple core functions.
Independent contractors can help reduce your staff costs. Instead of hiring a full-time employee and paying benefits for that staffer, you may consider using a contractor. For on-demand skills, such as technology work, an independent contractor can quickly get important tasks completed.
Finding independent contractors is relatively easy. There are multiple work platforms where contractors advertise their talents, expertise and experience, along with their rates.
Consultants are another way to save money. Consultants provide expertise and insights that can help you identify and solve critical business issues.
Hiring consultants may seem expensive at first. However, they can save you money in the long run, reduce the need for additional full-time staff, and pay off in improved efficiency, better sales and more customers.
One note: When hiring contractors, be sure to understand the IRS guidelines to ensure you do not run afoul of the law.
12. Look at Office Supply Expenses
Office supplies are necessary … and fun. Most people enjoy getting that new package of Post-it notes or pens, delivered to their desk and ready to use.
However, office supplies can be a black hole of business expenses, especially if multiple employees are able to order at will.
Office supply closets exist for an important reason. Having a central hub for supplies that’s managed and inventoried can reduce the expenses that can crop up.
You can also save by ordering office supplies in bulk or using nontraditional office supply vendors or online sites.
Running a New York small business can be an exciting way to start and operate your own company. But costs, in one of the most expensive states in the nation, can add up quickly. By getting creative about the ways you assess your expenses, you can reduce costs and earn more money.
