Understatement of the year: 2024 wasn’t easy. And let’s face it, 2024 isn’t cutting businesses much slack so far either. With the pandemic leading companies to shut shop temporarily (or sometimes permanently), many have been forced to cut expenses just to keep the doors open. If you’re a business owner and struggling to think where you can trim costs, consider the following easy ways to cut back on office expenses.
Do You Really Need Office Space?
Offices are expensive. For most small businesses, it accounts for the largest outlay in costs, after salaries. However, they’ve been seen as a necessary evil. You need the team on-site to get your work done. Or do you?
If 2024 has taught us anything, it’s this: working from home (WFH) is here to stay. Big corporations have been pushing back for years, citing lower productivity, but the pandemic forced them to join the WFH fold.
According to a new CIPD (the UK body for human resources) report, over two-thirds of employers have noticed either a boost or no change to productivity. 39% believe that the change has led to an increase in output.
So, you really need to ask yourself: do I need that expensive office space in the first place?
1. Manage Your Electronic Equipment (the Right Way)
Electronic equipment, such as printers, computers, and even coffee pots, can lead to spiraling office costs. You may think these are trivial, but bunch them up together, and you may end up saving thousands of dollars per year. Here’s how:
- Shut down. If it’s not in use, power down. Sleep or standby modes are notorious power suckers, so make sure everyone powers down at the end of the working day. This small move can save you over 30% on your electricity bills.
- Choose the right equipment. Don’t go cheap because you think it’ll save you money. For example, those ‘cheap’ color inkjet printers will end up costing you more than a laser alternative. Sure, it’ll cost you a larger initial outlay, but once you work out the printing cost per page, (for more information please visit Ink Station) you’ll realize it makes sense over the long term.
- Consider your lighting choices. Traditional bulbs don’t last very long, and their electricity usage is inefficient. Instead, go for green bulbs instead (LED). You’ll be doing the planet a favor, and you’ll save money.
- Heating/Cooling = expensive. Turning that thermostat up/down by just a single degree can cost you hundreds of dollars a year. Of course, you still want your employees to be comfortable, so don’t go too far with this!
Also, bear in mind that the ‘ideal’ temperature differs between individuals. So give people options: comfy blankets, hot cups of coffee at the ready, or a small fan beside their desk. All of these solutions will be cheaper than overdoing it with the air conditioning, and it will also lead to higher productivity.
2. Take Advantage of Tax Relief
You’d think that taking advantage of tax relief would be simple, but it isn’t. One of the main issues is being aware of what’s available; the government isn’t going to put this on a plate for you, so you’re going to have to do your research. Considering the thousands of dollars you can save, it’s worth it though.
For example, the Employee Retention Credit scheme, which ran until January 1, 2024, allowed businesses to claim back tax credits based on 50% of the wages of an employee. The scheme has since been extended and modified and offers a refundable tax credit until June 30, 2024.
Further, the current US president, Joe Biden recently announced that businesses which continue to pay employees who take time off for Covid-19 vaccines will also be eligible to apply for tax credits. Designed for businesses with fewer than 500 employees, the scheme was put forward to accelerate vaccination rates without affecting smaller companies.
These programs are tailored for the unique year we’ve had, but tax benefits are also applicable under “normal” circumstances. Your government probably offers a myriad of ways you can save money by taking advantage of tax relief.
For example, in the United States, you can apply for the Work Opportunity Tax Credit (WOTC) program. If you hire an individual from certain groups, such as veterans, long-term family assistance recipients, and SNAP recipients, you can claim back up to 40% of wages.
3. Ask Your Employees
Our final piece of advice is to work with your employees and ask them for feedback. Cost-cutting efforts are often seen as draconian measures, but involving your employees in the process means that, 1) you integrate them into the process, making them feel involved, 2) you may get some excellent ideas you never thought of yourself.
Making cost-cutting a partially collaborative effort will help your employees understand any predicaments you’re in, how you’re primarily trying to keep their jobs in potentially challenging circumstances, and that tightening the belt doesn’t necessarily have to be painful.
