Reducing cost and minimizing waste are efficient ways to maximize your profits, providing you cut the right costs. Recognizing which business expenses are essential and which are superfluous is key to making the right decisions. After all, damaging your processes or reducing quality will harm your outputs and alienate your customer base. To ensure you’re prioritizing the most important resources, take a look at these three expenses small businesses can’t afford to cut:
1. Tax Advice
As a commercial entity, you’re going to be liable for some form of tax. Corporations are required to pay corporation tax at the current rate of 21%, for example, while sole proprietors will be taxed on their business profits via their personal tax return and a Schedule C submission. While you can’t avoid paying tax, you can adjust your operations in order to reduce your tax liability.
This means you’ll be able to pay less tax and potentially reinvest extra funds into your business. Of course, you’ll need to access reputable tax advice in order to know which tax breaks you’re eligible for and how you can minimize the amount you owe, so this is one form of business expenditure you won’t want to cut.
2. IT Support
Today’s businesses are reliant on their IT infrastructure. Without it, it’s impossible to run your organization efficiently, which means having access to small business IT support is essential. As well as providing you with the assistance you need when things go wrong, an IT support team can futureproof your business by helping you to choose the right tech software and hardware. Additionally, you can rely on cybersecurity professionals to protect your data, systems and business from online threats.
With so much resting on your tech setup, finding, and funding, the right level of IT support should be a top priority for every small business. You may not need an in-house IT department, but there’s no doubt you’ll need on-going IT support.
3. Marketing
When you want to reduce your costs, slashing your marketing budget can seem like a good place to start. Without effective marketing, however, you’ll struggle to acquire and retain customers, which means your income will decrease. Furthermore, suspending your marketing activities now will mean losing all the progress you’ve made.
If you’ve invested heavily in SEO and secured high rankings, for example, abandoning or downgrading your campaign will result in your webpages sliding back down the rankings. If you want to maintain your current position in the market and continue generating the same level of revenue, your marketing budget isn’t the place to start making cuts.
Maximizing Your ROI
Most small businesses operate with a restricted budget, so reducing your expenditure is an important way to boost profitability. However, it’s vital to determine what returns your current expenditure is providing before you decide which costs you can afford to cut. By prioritizing the expenses that facilitate your operations and generate a high ROI, you can ensure that you can continue to operate successfully while reducing your overall running costs.