Business earnings are a two-part equation comprising revenues and expenses. Increasing revenue is a challenge that small businesses are always trying to address: attracting new customers and expanding the amounts that existing customers will spend. This can be a particularly big challenge at a time when the economy is uncertain. Some spring cleaning might be the trick.
Biz2Credit’s latest monthly Small Business Earnings Report (March 2025 figures) found that small businesses saw a slight uptick in earnings, despite lower revenues and expenses. What made the report positive is that expenses declined more sharply than revenues. The result was that average monthly earnings were $38,600, an increase of $1,500 from February’s figure. This continued rise in earnings is a welcome sign amidst the recent uncertainty within the stock market.
Key Findings for March 2025
- Average Monthly Earnings: $38,600. (Feb. 2025: $37,100 – an increase of $1,500)
- Average Monthly Revenue: $531,900. (Feb. 2025: $627,900 – a decrease of $96,000)
- Average Monthly Expenses: $493,300. (Feb. 2025: $590,800 – a decrease of $97,500)
A year ago (March 2024), average revenues were $692,900, while average expenses were $651,200. Average earnings were $41,700, a figure that is $3,100 more than the average earnings in March 2025.
The report summarizes primary data of companies that applied for funding on Biz2Credit’s award-winning digital funding platform each month. It assesses the financial health of small businesses by analyzing primary data provided directly by small to midsized firms in the U.S. as part of the financing application process. It provides one of the most up-to-date readings on the financial health of small businesses currently available.
Regardless of whether inflation continues to rise or if recession looms, reducing expenses is a smart way to improve the financial situation of your small business. Now that the April 15 tax filing deadline has passed, small business owners can really take a hard look at last year’s earnings, revenues and expenses to determine how to improve. Consider it time for spring cleaning your business. Here are some tips.
1. Lower Your Credit Card Debt
Cash flow issues can slow down a company’s ability to keep debts current. If you are using credit cards to pay expenses, the interest charges on bills that are not paid in full each month can be in the range of 24% to 29%. This can quickly become an astronomical burden on small business owners.
If you have gotten into a situation in which your company is drowning in credit card debt, consider opening a card that offers an introductory 0% APR on purchases and balance transfers. The time period can range from six months to 18 months. In essence, by opening a card with a 0% balance transfer, you can buy yourself a little more time to pay off debt. Just remember after that after the introductory time period is over, the variable APR jumps up to normal ranges. Take advantage of the opportunity by cleaning up the credit card mess your company may have gotten into.
Related: Best 0% APR Business Credit Cards For 2025
2. Clean Up Your Accounts Payable
If you have credit with vendors directly, don’t let old bills pile up. Some vendors may charge late fees and interest. Clean up past due invoices before vendors get frustrated with non-payment and cut off your supply chain. That would ultimately cause harm to your daily operation. Further, if collection notices come in, it becomes a mark against your credit rating that will lower your score and make it harder to secure credit in the future. Remember, the most attractive business financing rates are given to those with better credit scores. Thus, it is important to do everything possible to stay current with payables.
3. Clean Up Your Accounts Receivable
Stay on top of your collectables. Be sure that you send out invoices promptly at the end of each month. After all, if you’re not in a hurry to collect your debts, why should others be in a hurry to pay you? Examine receivables – especially ones that are over 60 or 90 days – to identify who owes you money. Then take swift action to collect it! You’d be surprised how effective a friendly phone call can be. Don’t assume something nefarious is going on; perhaps your client has been ill or is facing personal challenges that are impacting their business. Or the company may be in flux because of the departure of a CFO, accountant or even an accounts payable clerk.
If multiple phone calls do not seem to yield results, it might be time to take more aggressive action. Don’t hesitate to ask for payment, especially on those accounts that are more than 90 days past due. Be persistent in collections so that your client’s cash flow problems don’t wind up becoming your cash flow problems. If you are negligent in collecting debts, then you are partially to blame for your own predicament.
4. Automate Processes
Cut down on printing costs by switching to electronic invoicing rather than printing and mailing invoices to customers. This is an easy way to reduce printing and postage costs, which rose from 68 to 73 cents last July. Earlier this month, the U.S. Postal Service asked the Postal Regulatory Commission (PRC) to approve another 5-cent increase to take effect July 13. Thus, the price of a first-class Mail Forever stamp will jump to 78 cents.
Similarly, if you are paying bills by check, switch to auto processing service providers, such as Bill.com, that can manage payment of employees and vendor invoices through ACH electronic transfers. This will expedite the payment process and cut down on the cost of printing company checks and mailing them out.
5. Create an Internal DOGE
Consider putting together an internal task force that is assigned to look for cost savings at your company. This means considering switching suppliers that might offer lower costs (without losing quality) and cutting department budgets to cut unnecessary spending.
Examine employee expense reports and consider setting a limit on how much your company spends on client entertainment. If sales reps are wining and dining clients, ask for a list of attendees and how they relate to your business. Set a limit of how much can be spent on a client dinner – that way, your reps might be less inclined to order another round of martinis or expensive bottle of wine.
If employees attend a conference, be sure that they purchase standard airfares instead of first-class tickets and book rooms only at conference-designated hotels, which usually offer the cheapest rates available. If the conference includes a lunch session, do not approve expenses for a restaurant lunch at that time. These are practical ways of reducing the costs of attending a conference without impacting the effectiveness of being there.
The Bottom Line
At a time when it might not be possible to increase prices higher than they already are to raise revenues, cutting costs is a tried-and-true method to increase profitability. There is little that any small business owner can do about President Trump’s tariffs and the impact they might have on the cost of goods sold. However, small business owners can control their cash flow management by lowering high interest credit card debt, eliminating late fees and penalties, automating processes to reduce costs, and examining and eliminating unnecessary or extravagant spending.
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