As mentioned in Step One, you can increase expenses (and lower profits) by stocking up on inventory and supplies and pre-paying expenses. If you have any cash sitting around, or you can reasonably use your credit line or a business credit card for purchases, stock up on supplies. For example:
Stock Up
- Look at your office supplies and copy paper and replenish to a reasonable amount.
- If you have supplies you use regularly in your factory, warehouse, or in your work, stock up on these too.
Pre-Pay
- Pre-pay insurances, like your business insurance or specialized insurance for your type of business (malpractice insurance, for example)
- Pre-pay your rent or your mortgage. If you pre-pay the mortgage, make sure you are drawing down the principal, not just paying additional interest.
- Pre-pay on subscriptions for professional journals or the reception area in your office.
Check with your tax adviser, to be sure the savings will reduce your income.
