Reducing The Costs Of Running Your Business

1692 WordsOct 18, 20157 Pages
How to Reduce the Costs of Running your Business In today’s uncertain and unpredictable business environment, the focus of business is toward efficiency. The cost of running business must correspond with the amount of revenues it generates. In other words, entrepreneurs must find an equilibrium point whereby cost is maintained at its lowest point without compromising revenues. The challenge for entrepreneurs is to keep operations lean; trimmed of unwanted fat around the sides so it can move freely, be flexible and mobile. Here are eight tips on reducing the costs of running your business: 1. Work from home Unless your rental expense accounts to no more than 12% of your monthly income, you are better off working from home than in an office. Rent can impact the ability of your business to generate significant profit because it is a fixed expense. You pay the same amount of rent whether business is good or bad. To make matters worse, rent is usually open for annual escalation. If your business does not require a full-scale office, consider working from home. In addition to cutting out rent, you also reduce transportation and other related expenses. Thus, by working from home you streamline costs and improve productivity because you don’t waste time commuting. However, you may have to rent a business address for your incorporation papers and to receive communication. Regardless, the cost of renting a business address is much lower than renting an office space. 2. Keep
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