Entrepreneur
Most cost savings aren’t dramatic — they’re hidden in plain sight.
If you’re running a business, you’ve probably seen your costs — materials, labor, insurance, utilities — increase at least 20% over the past few years, maybe even higher.
Producer price inflation came in “hot” in February at 3.4%, well above the Federal Reserve’s target. Tariffs are taking a bite. And war in the Middle East has spiked the cost of petroleum, which not only impacts the price of gas for your vehicles but will soon push the costs of other petroleum-based products like lubricants, solvents, ink, wax, dyes, paint, rubber and plastics higher in the months ahead.
How can you keep your costs manageable? The truth is that savings are hiding in overlooked operational areas. Here are seven ways you probably haven’t considered.
You’re probably overpaying for energy — and your utility company will tell you how to fix it for free
Most local utility companies provide energy audits for their small business customers. For example, my provider — PECO — offers customized reports and online tools to benchmark energy usage, incentives for better energy consumption, rebates for buying energy-efficient equipment and free energy assessments. They can also recommend products from lightbulbs to thermostats, which can better manage your energy usage. Contact your utility and lean on them for ways to cut your company’s energy costs.
Most businesses stick with the same suppliers for too long — and it’s costing them
Tariffs have increased costs for many of my clients, and yet few are proactively searching for alternatives. It’s easy to stick with the status quo, but in these volatile times, finding an alternative supplier could mean a huge difference for our profits.
To that end, consider the World Trade Centers Association to connect with foreign suppliers that may be in more tariff-friendly regions. Check out the Small Business Administration’s Make Onshoring Great Again portal to investigate domestic suppliers for your products. And spend some time both on both Alibaba’s and Amazon’s B2B portals, where you may find great deals on parts and materials.
Your credit card could be one of your easiest profit levers — and you’re probably ignoring it
Speaking of Amazon, I would strongly consider signing up for the Prime credit card, where you can realize as much as a 5% discount on your business purchases.
Besides Amazon, take another close look at your company’s credit card. I submitted statements and my goals (i.e., points vs. cash rebates, travel preferences, etc.) to ChatGPT and Claude and, thanks to their advice, switched my company’s credit card to a new provider where I’m earning significantly more points for my purchases. Being proactive can really make a difference to your profits.
Your healthcare contributions can be saving you and (and your employees) even more money
Here’s an accounting trick: this year, instead of giving your employees raises, consider contributing more towards their group health insurance. When you do this, both you and the employee save on federal taxes (compensation is taxable, health contributions are not), and the employee also benefits from having a higher net paycheck. Of course, run this by your accountant and payroll company first, but you’ll likely be surprised at the savings you can realize while at the same time offering even better benefits to your workers.
Your older workers are unnecessarily increasing your healthcare premiums
Approximately 20% of U.S. workers are over the age of 65, and, as the population ages, it’s safe to assume that this will increase over the next few years. If you’ve got employees in this demographic, help them move off of your group insurance plan to Medicare. The decision can be complicated for some, so it may be worthwhile to use an outside consulting firm to assist. But when the smoke clears, the employee may be receiving better (and cheaper) coverage while at the same time you’re realizing the lower premiums from having less risky employees on your healthcare plan.
Your group health insurance costs can be more easily controlled with an HRA
One more healthcare tactic that’s grown in popularity, particularly for small businesses, is moving away from group insurance plans and instead offering Health Reimbursement Arrangements (HRAs) to employees. The use of these plans has grown substantially over just the past few years, and it’s understandable why.
Simply put, HRAs (and there are various forms to investigate) allow the employer to contribute pre-tax funds to an employee’s account, which can then be used by the employee to purchase their own healthcare insurance, either from the exchanges or from a broker. Besides potentially giving your employee more options, you get to have better control over your healthcare spending. No longer do you have to comply with the inevitable annual premium increase (expected to be as much as 6.5% in 2026) from your insurance provider. Instead, you contribute what you can afford.
Work-from-home policies are controversial. But the right approach can save your business money
The work-from-home debate will never go away, and I personally know a number of clients who passionately argue both the pros and cons of this workplace model. But the more employees that can work from home — even a couple of days a week — the less space you need in your office. The less space you need, the less rent, utilities and office costs you pay. It’s all about balance, and you don’t want to harm your culture. But if you can find that balance, and as a result cut (or better use) your square footage, the model can be a great solution all around.
There’s no single fix for rising costs. But I’ve learned that the businesses that stay ahead aren’t just cutting — they’re constantly rethinking where money is being spent. Most cost savings aren’t dramatic — they’re hidden in plain sight. If you’re not reviewing these areas, you’re probably leaving money on the table.
Most cost savings aren’t dramatic — they’re hidden in plain sight.
If you’re running a business, you’ve probably seen your costs — materials, labor, insurance, utilities — increase at least 20% over the past few years, maybe even higher.
Producer price inflation came in “hot” in February at 3.4%, well above the Federal Reserve’s target. Tariffs are taking a bite. And war in the Middle East has spiked the cost of petroleum, which not only impacts the price of gas for your vehicles but will soon push the costs of other petroleum-based products like lubricants, solvents, ink, wax, dyes, paint, rubber and plastics higher in the months ahead.
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