Small business owners must watch every penny as the economy slows. Today, I will share how to reduce business expenses this year. Follow along and identify areas where you can reduce costs without compromising quality.
The biggest business expenses in a small business are payroll, technology, and marketing; however, other unforeseen expenses include time wasted on tasks that aren’t reviewed regularly and recurring charges that aren’t monitored. Review the business costs listed below to determine whether they are optimal and will increase your profit margins. We will break each one down and share additional information that may help you reduce business expenses this year. Let’s begin! This post has been updated for 2026.
Estimated reading time: 14 minutes
Key Takeaways
- To reduce business expenses, small business owners should evaluate costs like payroll, technology, and marketing.
- Strategies such as going paperless, creating a budget, and outsourcing tasks can significantly reduce expenses.
- Reviewing utility bills, internet services, and supplier agreements helps identify potential savings.
- Small businesses can maximize savings by assessing automatic charges, insurance policies, and equipment purchases.
- Regularly reviewing office supplies, processes, and payroll services can lead to better spending decisions.
1. Go Paperless
The first tip to reduce business expenses is to go paperless. You may have done this a while ago when it was all the rage to cut costs. But if your business is new and growing, you may be using more paper than you need. You may find that you no longer need to mail the invoice. Instead, you could email it. Feel free to check out our post with tips on going paperless.
2. Create a budget and determine your monthly expenses.
This has two tasks: create a budget and determine your monthly expenses.
If you haven’t laid out a budget for your business, it is a good time to do it. Collect all your expenses into one spreadsheet. With your P&L yearly report, divide the total of each category by 12 to decide what each category’s budget should be each month. Tracking this amount in your business app will show you how you are doing, what expenses are getting out of hand, and where you can save money. Below are instructions for setting up a budget in different business apps.
QuickBooks Online – How to set up a budget
Quicken – How to set up a budget
Manage your financial life and achieve more. Try Quicken for 30 days with our money-back guarantee. Products To Help You Manage Your Money:
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3. Buy used equipment
If you need equipment for your business, consider buying used equipment to save money on the initial investment. Check out places like Craigslist, eBay, Equipment Trader, and Groff Tractor that may be able to help you find used equipment.
4. Outsource tasks to free up your time.
Your time is valuable, so delegating to independent contractors at half your hourly rate can save you money. You can also visit our other posts about the benefits of outsourcing tasks.
5 Ways to Outsource Work to Save You Time and Money
How to outsource work at your marketing agency
Visit our services for help with your business.
Virtual Assistant Services Series Posts:
5. Process Improvement
Time-consuming tasks may cost you more money than you think. Reevaluating your steps and processes will help you do this easily and identify the most money-intensive areas of your business. Feel free to check out our service to help 1-5 full-time employees business streamline processes. You can also visit our other posts below, where we talk about ways to improve processes in different areas of the business.
The Complete Guide To Simplify A Process
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Important Tips When You Set Up The Business Emergency Process
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Keeping the Business Brand Consistent is Key to Brand Awareness!
Deluxe offers everything from office supplies to customized products. You may need to do just that, including eco-friendly options!
Check them out today for the best deals!
6. Reduce Travel Expenses
If you travel for work, can you or your staff do things remotely? Instead of meeting with clients (affiliate) in person every week, how about shifting to twice a month, with the other week reserved for virtual meetings on Zoom?
Instead of having an office space, you could reduce in-person visits or allow staff to work remotely. Remember that this will only work if your staff is driven and focused. Visit some of my posts below for help.
Easy Ways to Track Mileage for Your Small Business
Whether you are tracking your small business mileage for tax purposes or for billing clients, it is essential to keep good records.
How to Stay Productive in Business While Traveling
Whether you have a second home or work travel, it’s important to have systems in place to support your small business while you’re away.
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Whether you have a business traveler in your life or you are a business traveler, here are my top business traveler gifts that every traveler would love to receive as a present this holiday season.
7. Find new suppliers.
You may have suppliers you have never worked with before and maybe want to try them out to see how it goes. Sometimes, suppliers will give you lower prices to start with to see if they can provide the same or better level of service as the ones you used. Asking about new suppliers’ deals could lead to a new relationship with lower costs.
I know this may take time to figure out who to use, whether they’re relable and then change the process. But if you’re dissatisfied with their service, you have the right to switch to someone more reliable and affordable. Try a smaller company that values your business more. Smaller companies will want a more established business to add to their clientele.
8. Save on the internet.
Revisiting your internet service can save you money if you have a few different options in your area. You may want to try AT&T or T-Mobile instead of Verizon or Xfinity to see if they can offer you a better deal. Asking questions to understand a competitor’s service offerings is vital for a smooth transition. Here’s a Forbes article that gives tips on how to find a provider.
Start by asking about their service bundles. If you have a personal account and you need a business account, see what deals they have. I found this was helpful when I was an office manager for a consulting company years ago.
Check out these comparison sites to do a comparison between internet providers.
Keep in mind that you may need to create a username and password for these sites and there may be some fees.
9. Reduce your utility costs.
Reducing energy costs can be challenging because it involves reviewing several types of utilities. Electricity can be a significant expense in your office. You can get a free audit from your local electric utility company, not the energy supplier.
You can also make sure your thermostats are programmed correctly. Reducing the thermostat by 5 degrees can save you money each month. If your business operates from 9-5, consider lowering the thermostat when no one is in the office.
Not every area of an office needs light. Turn off lights in areas that aren’t in use. You can even replace bulbs with energy-efficient options, such as LEDs.
Choose ENERGY STAR-rated appliances to help keep operating costs low.
Here are a few quick ways to reduce your energy bill.
Install Smart Thermostats: Program automatic settings during the day while in the office and set the thermostat down or up by 7-10 degrees F for 8 hours a day. This can save you 10% annually on heating and cooling costs.
Maintain HVAC Equipment and replace filters monthly. This protects the system from overworking. Also, schedule an annual professional checkup to keep the system running effectively.
Seal Air Leaks around windows and doors: using waterproof, paintable caulk around windows and doors is great to keep the heating and cooling where it is supposed to be, in your office.
10. Revise Your Business insurance policies.
Contact your insurance agent to renegotiate your policies, especially every few years. You can reassess various policies, like these below:
- professional liability insurance
- auto insurance
- renters’ insurance
Increasing deductibles and bundling policies may help you save money. If you can, try paying your insurance bill in full each year; you can get a significant discount by changing how you pay.
11. Reduce overhead production costs.
Not everyone has production costs. However, if you do, reassessing yours could lead to increased savings. Visit this post to REDUCE THE COST OF PRODUCTION.
Do an inventory check regularly to see what you run out of most often. Creating an inventory list for frequently used supplies can help you find the best deals and reorder them before anything runs out. Get more information below.
How To Create A Business Frequently Used Supply List
Every small business has supplies it needs and uses repeatedly. Printer cartridges, printer paper, copier paper, pens, staples, supplies for products sold, supplies for services performed, etc.
12. Reevaluate your automatic charges.
Sometimes, we forget the automatic charges we have on our business credit cards. Review your credit cards each month to see if any charges are made that you no longer use. Review your credit card statement to see all recurring payments, especially small ones.
13. Reevaluate your staff’s responsibilities.
When we can’t hire new staff, it’s important to reevaluate what our staff is working on. To save them time and frustration, ask what takes up most of their day. And really listen to their answer. They can likely streamline their process with a few modifications. Resulting in less work for them and more money in your pocket.
How to Create a Simple Roles and Responsibilities Chart for Your 1–5 Employee Business
Does any of this sound familiar? A client emails a simple question, and three people on your team all look at each other. A task that was supposed to be done last Tuesday? Nobody realized they were the ones responsible for it. Sound familiar? You’re not alone — and it doesn’t mean your team isn’t
14. Automate using AI.
Automation is the name of the game these days. Everyone wants to automate everything. But how much can you automate before it becomes impersonal for customers? Finding out what your customers want from your company and staff will give you an idea of what other things you can automate instead of your staff’s jobs.
Use AI to speed up your time researching or finding the right words when generating posts. Apps like Hootsuite and Tailwind can help you with this. Just add your and your business’s personality to the content. Don’t go straight with what AI gives you.
15. Review your office supplies expenses.
Create an office supplies (inventory) list of the products you use and hang it in the office to reduce overspending and improve cash flow. Keep a list of product names, the quantity you need in stock, and where you purchase the items. Then, hang it in the office supply area for easy access. Read our post about Office Supplies Organizing.
16. Hire an expert to help streamline your business.
You can hire a specialist if you identify areas where you may need assistance. For example, you can hire an accountant or bookkeeper if you are concerned about your business books. You can hire a marketer or copywriter if you need help with some ad copywriting. Step back and analyze your business as a CEO to identify areas that lack effective systems. Feel free to check out my services for support!
17. Dabble in social media marketing instead of PPC advertising.
A social media marketing strategy and steps to help share your products, services, and knowledge will reduce your need for PPC advertising on Google, Twitter, LinkedIn, or Meta. A social media scheduler or Meta Business Suite will let you schedule posts in advance. Visit the post below where I share several industry-specific social media post idea series.
Social Media Post Ideas for Small Businesses by Industry
Social media engagement can be difficult for many service-based industries. Over the last 15 years, I have worked with small business clients in several of these difficult industries through website content and social media marketing.
18. Cloud Storage Services Review
If you use cloud services like Dropbox, Google Drive, Microsoft OneDrive, iCloud+, etc…, you may want to reassess them to see if they are still crucial for your business. Do you need all of them? Would it work better to upgrade one and cancel the others to the free version? Downgrading or switching to a smaller storage plan may save you money.
19. Gas and Auto Repairs Review
If you have a fleet of cars, gas and auto repairs could be a significant expense. If so, you may want to pull your automotive expense details from your P&L report for the year and review them to see which vehicle costs the most and decide if there is something you can do to reduce the cost of that vehicle.
When pulling the P&L report for the prior year or two, visit the automotive section to see how much each car costs to maintain. Creating a subcategory for each vehicle under the main automobile category is essential to view this data clearly.
20. Reassess the membership dues.
Are you a member of several associations? Taking time to see what you need and what you don’t may save you hundreds of dollars each year.
21. Review the Website plugin services.
The next section to reduce business expenses is any website plugin services you purchased. Some services are valuable, and others are not. If you have a blog and use WordPress, you may have expenses you no longer need. Not renewing them will save you money in the short term. Make sure you fully understand what the service provides before turning it off and saying bye-bye.
22. Review your estimated taxes.
The following is where you can save money on estimated taxes. Try to be as accurate as possible with your business estimated taxes. Ask your accountant to help you figure out the most precise amount of estimated taxes you should be paying each quarter.
23. Maximize Your Tax Deductions and Credits
Many small business owners underclaim deductions simply because they don’t know what qualifies. Home office expenses, mileage, a portion of your phone or internet bill, and business-related subscriptions or software can all reduce your taxable income. Sit down with your accountant before year-end to make sure you’re capturing everything you’re entitled to; it’s one of the few expense-reduction strategies that costs nothing to implement.
24. Analyze your office services.
If you have a cleaning service, window cleaning service, or other services, reassess their importance or reduce how often you use them this month.
25. Revisit your rentals.
The last way to reduce business expenses is to revisit your rental costs. Can you purchase any items outright to eliminate recurring rental costs?
Please note that cutting staff is not the best measure to reduce costs. It will damage staff morale, which may lead to unforeseen expenses. Read more about why in this Forbes article.
26. Review Your Payroll Service Level
When you first purchased your payroll service, they likely placed you in white-glove service, where they could assist you directly if issues came up. However, if you have been in business for a few years and haven’t used this service, you can contact them and ask them to drop your white-glove service.
FAQs
Check out the questions and answers below for help with a few unique tips.
Most businesses accumulate SaaS tools over time, like project management apps, email platforms, and design software, that quietly keep renewing even after the team stops using them.
Reviewing your subscription list every quarter against what you actually use, and canceling or downgrading the rest, is one of the fastest ways to free up monthly cash flow without cutting anything essential.
A white-glove payroll service means your provider handles issues and questions directly on your behalf, typically at a premium price.
If you’ve been in business for a few years and rarely need that hands-on help anymore, contact your provider and ask to drop to a standard service tier to lower your monthly payroll costs. You just need to call them back, speak with your representative, and reduce the service.
No, cutting staff should be a last resort, not a first step, since layoffs damage morale and can create unforeseen costs down the line.
A better approach is to reevaluate what your current staff spends time on and streamline or reassign tasks that are eating up hours without adding value.
A consistent social media strategy lets you share your products, services, and expertise organically, which reduces how much you need to spend on pay-per-click ads on platforms like Google, LinkedIn, or Meta.
Common fees include monthly maintenance charges, return check fees, minimum balance fees, and per-transaction fees.
Call your bank to ask about a fee waiver, or compare offers from another bank or credit union in your area; trimming even $15 to $25 a month adds up by year’s end.
I hope these tips reduce your company’s expenses and improve your bottom line. Please share additional tips to help other visitors. I would love to hear from you!
Need a hand putting any of this into practice? My Recurring Admin Services help solopreneurs and small business owners (1-5 employees) stay on top of the recurring tasks, like reconciling accounts, auditing subscriptions, and streamlining processes, that are easy to let slide when you’re busy running the business. Let’s talk about what’s on your plate (affiliate).
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