50 Percent of Small Business Expenses are Created on The Go: Cost Cutting Tips Inside

Are you looking long and hard at your small business expenses report, wondering why your small business is barely survive last month – and still can’t get the answer? This blog post can give you one or two areas you can focus on and start solving your cash shortage issues almost immediately.

cost cutting

It’s official: You can cut your small business costs easily by taking care one, single area that has the biggest impact on your total expenses. Can you guess?

It’s your ‘on the go’ business expenses.

According to the research done by Shoeboxed – an online receipt management tool – on 12,000 small businesses, your ‘on the go’ expenses – airfare, taxi, gas, meals – account for 50 percent of your total expenses.

Obviously, if you can take care of your ‘on the go’ expenses, you can make a significant impact on your bottom line. The big question is, how?

First things first: Get some background information to work on

This Shoeboxed SlideShare can give you a good intro on the Shoeboxed infographic below. Let’s just say that the research represents US’ small business averages. So, if the ‘on the go’ expenses are costing an average of 50 percent, that’s the figure to beat especially if your costs are higher than that.

Via SlideShare

And here’s the infographic containing very useful information on what you can reduce in your expenses column…

Small Business Expenses - Shoeboxed Infographic
Via Shoeboxed Blog

To recap, here are some areas that you can focus on – other than the obvious on-the-go expenses:

  • Utilities: A whopping 135 percent jump means there is a huge room for improvement for your business.
  • 70 percent of small businesses prefer US Postal Services over smartphone and computer.
  • Meals/Entertainment accounts for 12 percent of total expenses; 11 percent goes to Auto/Fuel expenses.

Cost cutting action plan

From just a few facts above, I get enough information to start a cost cutting campaign consisting of small changes that can add-up into a big change on your bottom line:

1. Telecommute/work from home

Whether you like it or not, telecommute or work from home can save you big: Utility, auto/fuel and meals/entertainment expenses will be reduced significantly.

If you hire staffs, letting them telecommute – perhaps 2 or 3 work days a week – will give them a boost in job satisfaction, which leads to better productivity and overall performance.

Of course, there will be pros and cons in telecommuting – but as I advocate location independent business/working, I can give you hundreds of reasons why working off-office will be beneficial for your business 🙂

2. Why business travel if you can use web-based tools?

If you double those business trips as an opportunity to have a fun along the way, it’s your choice; but if you are doing travel because you feel you need to do that to do business, there are many reasons why you shouldn’t do business travel.

Online communication (e.g. Skype,) online collaboration (e.g. Basecamp,) and other web-based productivity tools can get projects and meetings done wherever you are. No more costly air travel and everything that comes with it – meals, accommodation, and so on.

3. Energy saving and healthy living initiatives

If you feel that running an office is crucial in your business success with no telecommuting possibilities on sight, then you can cut costs by launching initiatives that are beneficial for your business and your employees.

Turning off and unplug devices when not in use, turning off lamps and maximise the use of daylight, adjusting thermostat temperature according to the weather condition, replacing you light bulbs with CFLs, and son on – these changes can help turning your work place into an eco-friendlier one, while reducing your energy costs along the way.

You can also promote healthy snacks on office – fruits, milk, and so on. This will reduce meal tickets (if that’s a part of the perks for your employees,) save energy (you don’t have to install that energy-hogging coffee dispenser on office,) and improve the overall health of your employees (which lead to better mood and productivity.)

4. Claim expenses as tax deductions

If you are having difficulty in reducing your ‘on the go’ expenses, let’s just go for the tax deductibles route. If you want to claim the expenses as tax deductions, you need to keep all of those paper receipts. It’s a major hassle, and you need tools to keep all of those receipts.

Your old shoebox might not be ideal – especially when things can go so wrong, such as flooding and all – there goes your tax deductions. You might want to try tools like Shoeboxed to record your receipts and store it securely – online.


You see, reducing your small business expenses is not arcane arts; what you need to do is identify your small biz’ weak points, compare that to the national averages and start ‘attacking’ those expenses. You can save thousands of dollars annually – that’s quite a lot.

Do you have tips on reducing your small biz expenses? If so, please share by leaving your comment on this blog post.