Wise spending is the key to success for small businesses, so keeping an eye on where the money is going is essential. Do you ever wonder how your spending habits stack up against the habits of other small businesses? Comparing your costs and expenses to other similarly-sized companies can help you catch areas where you could be cutting costs, from overpaying for employee benefits to paying too much for credit card processing. Here’s what you need to know about the expenses most small businesses face:
Employee Wages and Benefits
According to American Express, small businesses are shelling out the most money on employee wages. In a 2011 survey, small business owners reported that wages made up 19.4 percent of their expenses. Employee insurance benefits accounted for another 2.4 percent of company expenditures.
Keeping products on the shelves is another major expense for small businesses. Inventory expenses eat up an average of 7.7 percent of a small businesses’ money each year. Of course, that number can be dramatically higher for small businesses that rely on product sales and much lower for companies that sell a service rather than a product.
Credit Card Processing Fees
For some small businesses, just getting paid represents a major expense. The credit card processing fees they pay on each transaction can take a significant bite out of their profits. Depending on the rates they’ve negotiated on their merchant account, small businesses can pay up to six percent or more of the cost of each transaction to their credit card processing company.
Don’t let credit card fees hold your small business back. Merchant Advocate can negotiate low processing fees on your behalf, and your upfront cost for our services is zero. Call (732) 727-2073 today to find out how we can help you keep more of your profits by reducing your credit card costs.