How to Reduce Expenses in a Home-Based Business

Working from home is less costly than renting office space. Once you've decided to skip the hassle and expense of commuting, there are additional ways to reduce your costs.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Multifunction Fax Machines
• Telephones
• Desk Lamps
• Used Furniture
• Trade Magazines
• Accountants
• Attorney
• Office Supplies
• Used Computers
• Small-business Accounting Software

1. Keep complete and accurate accounting records, and review your expenses at the end of each month to determine where you could cut back.
2. Join a purchasing alliance for small and home-based businesses to get discounts on everything from health insurance to office supplies.
3. Purchase multifunction office machines. For example, look for a fax machine that also copies and scans documents.
4. Take tax deductions for business use of your vehicle and home.
5. Earn supplier discounts. Often a supplier will offer a 2-percent discount if an invoice is paid within 10 days of the invoice date.
6. Give free Internet access services a try (see 'eHow to Evaluate Free Internet Service Providers').
7. Go over your insurance coverage with your agent and look for ways to cut your premiums. Consider adding an incidental business option to your existing homeowner's insurance at a much lower cost than a standard business liability policy. Shut off nonessential equipment at night.
8. Check garage sales and thrift stores for office furniture. You can get great bargains, and sometimes you can even find like-new used or reconditioned fax machines and typewriters.

Tips & Warnings

• Consult an accountant before taking deductions for business use of your home and vehicle.
• If your current suppliers don't offer discounts for early payment, try to find those that will. At the very least, pay your bills on time so that you won't have to pay late fees.
• Don't get too budget-happy and stop buying items that are truly necessary to your operation, such as trade journals and required continuing education courses.