Whether you are starting your own business from the ground up or you have recently purchased a small business, it can be extremely challenging to know that you are really using your money in the smartest way possible from the get-go.  As you get ready to take charge of your new small business, make sure you know all of these money savings tips in advance so you can make them an intrinsic part of your business practice.

Good Budget Practices

The first place you need to be sure you are saving money is in your budget.  Before you start to spend any money, make sure that your plan for your expenditures is reasonable, fair and cost-effective.  Check out some of these tips to help you stay on track.

1. Be smart about your advertising.

Advertising can be a huge expenditure and if you’ve never planned out an advertising budget before, it could be very easy to spend way too much while you’re anxious to see early sales pick up.  Instead, make a careful plan for your advertising budget for your first year.  Allocate a certain amount for your open house.  Use the rest on both print and web-based advertising.  Depending on your industry and clientele, it may make sense to focus more on one type of advertising than another.  Be sure to take advantage of free advertising opportunities as well including email blasts, ads placed in newsletters, and coupons included in sales packages.

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2. Encourage referrals.

One of the biggest challenges for a small business is in finding new customers.  Once you have found a customer, it’s just a matter of making a good impression as many customers of small businesses will gladly come back for future service.  But with a limited advertising budget, how do you reach new customers?  Encourage referrals through rewards programs and discounts.  Offer a discount for anyone who leaves a Yelp review.

3. Shop smart.

When choosing an office location, consider logistics.  What amount of space do you actually need for your regular operations?  Can you save money and space by having some employees work from home?  When buying office supplies and furniture, be sure to buy everything used.  You can even buy reused ink cartridges for your printers at some office supply locations.

4. Be careful with mailing and shipping.

Minimize your expenses by combining items for shipping and using flat-rate boxes.  Ship early in the day to get faster shipping for a lower price.

Planning for Taxes

One of the biggest challenges you will face as the new owner of a small company is in figuring out your taxes.  Here are a few tips to help you keep your taxes under control.

1. Start tracking your business credits and deductibles right away.

If tax season rolls around and you have not been calculating your travel miles and other qualified deductibles, you could end up spending way more than you need to.

2. If you think you might not be able to pay your taxes on time, be ready in advance.

The best thing you can do in this situation is to get in touch with the IRS early and often.  Make sure they know the circumstances of your inability to pay on time.  If you can’t get an extension or you are still not able to pay before the extension deadline, you may be able to get an offer in compromise to lower the total amount you will have to pay the IRS.  You may also be able to claim “uncollectable” status, which means that the IRS would agree to not collect on your debt and taxes for a certain period of time.  Keep in mind that the biggest problem most companies will face is with payroll tax problems.  This is the situation in which the IRS is most likely to disrupt your operations or even close your doors.  Should you run into this situation, it’s probably time to seek out payroll tax debt relief.

Planning Smart

The more you plan ahead when starting your new business, the better your long-term financial health will be.  Even if you can’t meet all of your financial goals for your first few years, it’s a great idea to start out with lots of goals in mind and a strict budget to follow to help you stay on track and out of trouble.