Poorly managed spending by small businesses can cause or break new startups. As a result of the financial crisis, cloud services have had a significant impact on the spending of small and medium-sized businesses, making it increasingly difficult for many start-ups, especially online businesses, to maintain sustainable liquidity.
Many small businesses pay for services that are not needed or could pay less. Unnecessarily focusing on and managing business costs can help your startup maximize its profit potential.
If you're not sure how to get money from a startup, or you're looking for ways to reduce your mandatory business payment costs, you can take advantage of the following 10 expensive services that small businesses have to pay for, but not:
1). To buy a van instead of express delivery, follow these steps:
Many small businesses provide home delivery services to specific customers. From banks to insurance companies to e-commerce companies and the like, they usually go to sell bicycles or vehicles to transport goods or packages.
The problem of managing the company's own logistics is the costs associated with the purchase of transport vehicles, their registration, refueling and maintenance and regular repairs. These activities can absorb the profits generated in the business. If your business consumes a lot of fuel every month, then a fuel card can be a good investment.
Outsourcing your logistics by a courier company can significantly reduce delivery costs and save you a negative operating cost of thousands of dollars each month.
2). Rental of large office space instead of regular or medium-sized:
A good large office can be good and is great for work, but renting is usually very expensive. The convenient potential of office space causes many small business owners to make the mistake of considering renting large offices for companies with only a few employees. Another excuse may be to appear professional when a client arrives.
It is recommended not to start in an office with more employees than yours. To save costs on every step, you can only work in a beautiful small office. If you have questions about the size and appearance of the office, you can get involved in collaborative spaces, such as CC-Hub or Capital Plaza in Nigeria. By joining them, you can ensure that your customers visit a friendly and professional environment where you have paid a reasonable membership fee.
3). Instead of sharing with freelancers, hire full-time employees:
Hiring full-time employees, which you will always find, is essential for any business, but sometimes it is most effective for a company to combine its employees with full-time employees and freelancers.
Positions with multiple service requirements should only be worked by freelancers or to save fixed staff salary costs. Although the fees charged by freelancers can be more than double the monthly salary, the long-term financial benefits of retaining individuals as temporary employees of the company go far beyond short-term financial constraints.
4). Pay for licenses and permits that are not necessary for its business:
Shipping companies usually have to pay for more permits and permits so that their transport fleet can easily reach many places in the country. The same goes for many other companies. Some businesses lose money because they try to pay for all possible licenses, including those that are not business-related, in order to carry out their day-to-day activities safely.
By always charging your trading costs for unnecessary permits and licenses, this will not only show that you have poor cash management skills, but your profit margins will always be slightly lower for a period of time.
5). Buy a brand new device instead of light use or leasing:
In any case, the best shopping tool is brand new equipment. Due to their relatively new conditions, their long-term use and effectiveness are not usually questioned. However, when starting a new business, the best way is usually to buy medium-sized equipment or rent equipment.
The reason for this method is that you spend your money on very expensive equipment, so you have little or no money left to run a business. On the other hand, leasing ensures that all other parts of your business can move forward and rent equipment only when needed.
This way you can save a lot of business costs.
6). Excessive taxation:
Many companies unintentionally insist on listing all costs that they absurdly noticed as part of corporate costs during the tax year. They make them feel that they are not interested, but they never realize that they will pay when this small amount accumulates within a year.
For those who use their homes as offices, they have forgotten the fact that, as individuals, they are separate from their own businesses and have to collect appropriate annual rents from companies, which can represent a high statutory tax deduction.
Many small businesses lose a lot of money for tax collectors due to many neglected operating costs based on previous assets and more.
7). Use a credit card to pay for the service:
Credit card fees in Western countries or regions may represent 3% of the provider's transaction price. This allows the company to get a higher refund amount each time the paper is used.
Instead of using only the credit card issued by the first company you meet, you can also carefully study all available providers to determine the best option for you. This way, you can save more money for your business.
8). Use VPS instead of sharing hosting:
Many new e-commerce companies have chosen to host their online stores on virtual private servers (VPS) instead of shared hosting. They always speculate that there will be a lot of traffic at launch, and they may not be prepared for what might happen. They don't realize that even though 10,000 unique visitors visit their site every day, shared hosting still works.
This mentality caused them to spend $ 299 a month, while for the same income they could spend $ 6.99 a month. When their startups ran, they accumulated a lot of business costs and eventually lost a lot of money.
If you want to run an internet startup that serves any purpose, starting a shared hosting instead of a VPS can save you hundreds of dollars a month.
9). Buy a new car instead of a used one:
In the beginning, cars were bought by small businesses by the most used foreign cars. They save money for small business owners and are still worth their money.
On the other hand, if you buy a brand new car, the resources will be depleted very quickly and you will still be depleted in the short term.
If you need a car or two to get started, then one way to manage your business expenses is to buy decent used cars just from new cars.
When it comes to choosing your commercial vehicle, you always have a choice. Instead of buying, you can rent a car at any time. Renting is even cheaper than a regular monthly car and you can save more money. With regard to vehicle maintenance, as the leasing company may also provide this service, the content included in the lease and not included in the lease varies from company to company. Rent a leasing company, so be sure to provide a complete overview of what it contains.
10). Hire an experienced accountant:
Experienced accountants are always costly to maintain. In addition, however, some small business owners are still trying to improve their financial situation by paying high fees for keeping these books. Most new businesses don't realize that it's more efficient and certainly cheaper to hire a simple accountant who records your transactions in books and records your transactions online through services such as Quickbooks.
To reduce accounting costs, you can do this in your record book or online, or you can hire a simple accountant to take care of it for you.
You can save a lot of operating costs by hiring an experienced accountant.
What do you think about these 10 business expenses that small businesses don't have to pay? Let me know by leaving a comment below.
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