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How Do Small Businesses Save Money in California?



California is one of the most popular destinations in the U.S. for small businesses. The thriving economy here and the huge, ready-to-target market is a great incentive for entrepreneurs. Take a look at the top industries that flourish here, and you will find a very interesting phenomenon. The most successful businesses in each niche come with very compact staff. Every year, you have innumerable start-ups coming up here that also succeed in achieving their goals.


But before you set up your firm here, it is a smart move to plan out your finances. As part of this process, you must also pay attention to the various ways in which you can keep your start-up and business operations costs low here. Look at some tips that can cut down your bills and keep them that way:


Move away with brick and mortar office


The most substantial expense for your business comes from the office space, especially if you are renting out premises in a prime location. However, Californians make this easy for you by embracing the e-commerce culture with great warmth. If the product/service you offer allows it, do away with a traditional brick and mortar office space and set up an e-commerce business. That way, you eliminate the office rent, which is a huge pay-out month-after-month.


A surprising number of services lend themselves to the e-commerce format. It might just take a little creativity for you to figure out how to make yours work. Remember that if you need to, you can also have a very compact office to handle the imperative face-to-face interactions. You can just manage the rest over the internet to keep costs low. Thanks to the San Francisco Bay Area and Silicon Valley, this marketplace is acquainted with e-commerce and used to it. Take advantage of this aspect to save money.


Short-term renting vs. long-term


Typically, you would think that a long-term rental would give you the lowest rent option, but here, it is not so. The demand for office space is so high here that owners of premises prefer short-term rentals. You might be able to find a great deal on rent if you start looking for a shorter lease. If much of your business is being done over the phone/via the internet, the location or frequent change in location does not affect your clientele at all. However, the lower rent does make a big difference to your cash situation.


Buy your equipment second-hand


California has a thriving second-hand items market. You can cut down costs in furnishing your office and purchasing your office equipment by opting for second-hand items rather than buying brand new items. Chairs, tables, shelves, and so on are all great examples of items that work just as well when they are second-hand. Office equipment, like shredders, printers, and monitors, are great options to consider buying second-hand as well. Of course, do a thorough inspection and testing of the item before you buy it to avoid making a bad investment.


Become tax savvy


Being smart about taxes can be a major factor in keeping business costs within reason in California. The reason is that there are many advantages that businesses have here that, when used optimally, can cut down your tax bill tremendously. For example, the business expenses are fully deductible directly from your gross income. This includes any expenses that can be categorized as ‘ordinary and necessary’ in order to operate your business. These expenses may also include those that have a personal benefit for you. Knowing what kind of expenses you can use as deductibles gives you a great way to cut your tax bill in a perfectly legal manner.


Consider having a home office


In California, using your home for specific business tasks may give you a full write-off for the home office. However, there are some rules to follow here. If you can conform to those and use your home in a requisite way, then this could be a good advantage to enjoy. Hiring a tax consultant at the set-up time can help you understand how this can be used.


Protecting your business finances


Apart from saving money, it is also important to ensure that you do not unnecessarily take on risks that could drain your finances. One important safeguard you need in place to address this is professional liability insurance. This insurance protects your business from financial liability in the event a client files a lawsuit against you for service they aren’t satisfied with. These lawsuits are more common than you think, and you could be facing a legal claim for:

  • Negligence
  • Incorrect advice
  • Delayed service
  • Poor quality service



Saving money is important when you set up your business, and equally important is to have the right insurance to safeguard yourself from financial liability. Visit to learn more about professional liability insurance.