DiSabatino CPA Blog

Mike DiSabatino CPA

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Want to minimize rent and storage costs? Consider this


Have you ever considered that you could be spending less on storage and rent? Consider these ideas for cutting down on costs. 

For many small businesses, office rent and inventory storage costs are perceived as fixed. But are such expenses truly inflexible? Oftentimes, no.

Because rent and storage costs often constitute a significant portion of a business's total expense budget, creative owners who find ways to minimize those costs may reap substantial rewards. Consider the following questions when trying to shave some money off your rent and storage costs:

  • Rent — Is it negotiable?  If your business is located in an area with unoccupied office buildings, you may enjoy a strong bargaining position. Open up negotiations, especially if you're nearing the end of a lease term.

    If your company is struggling, consider letting your landlord read your firm's financial statements, making it clear that a reduction in rent would enable your business to survive and prosper. A renegotiated lease agreement might also provide for a temporary rent reduction in exchange for increased payments when sales start climbing.
  • Moving — Is it an option? Just because you settled in this location years ago doesn't necessarily mean you should stay put. You might get better lease rates across town, closer to your customer base or suppliers. Or you might pick up stakes and take your business back home.
  • Subletting space — Should you become a landlord? If your current landlord agrees and your lease terms allow, additional cash may be generated by setting aside space for a rent-paying partner or another company. But be sure to consider possible ramifications. Confirm that you won't need the space in the near term, and don't forget to specify conditions under which the location can be reoccupied or the lease terminated.
  • Inventory control — Can you minimize storage costs? If goods have been sitting on your shelves for too long, it may be time to sell, donate or otherwise dispose of them. Insurance, spoilage, interest and taxes (basically all the costs associated with storing unused or obsolete inventory) can eat up your budget in a hurry. If storage capacity is limited, disposing of obsolete stock may also free up space for saleable items and fresh materials.

       As always, feel free to pass this Tip along to friends, and reach out if you need help with your personal tax and finance situation. 

    DiSabatino CPA
    Michael DiSabatino
    651 Via Alondra Suite 715
    Camarillo, CA 93012
    Phone: 805-389-7300
    This publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. All rights reserved.


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