While most small business owners are optimistic about the economy and company growth this year, they are concerned about inflation and rising business expenses.

Average monthly expenses for small businesses in the first 11 months of 2024 was $660,809, which is $296,517 higher than 2023, according to research from Biz2Credit, a New York-based agency specializing in financing options for small businesses and entrepreneurs.

If you're looking for ways to cut costs at your small business in 2025, take a look at these five tips.

Consider Raising Your Prices. This is always a tough place to be. However, it may become a necessary assessment for business owners seeking ways to maintain profit margins as their own expenses rise.

There are several factors to take into account when deciding whether to raise your prices and fees, such as market conditions in your industry and strategic timing.

"Before raising your prices, consider not only your current costs but also any cost increases that are likely to happen in the next year or two," says a post shared by American Express on its Business Class site.

"You don't want to go through a huge struggle to raise prices, only to find four months later that you need to do it again."

Leverage technology. Investing in technology could help your small business streamline processes and automate tasks. For example, see how you could leverage AI applications in ways that could benefit your company's bottom line.

However, entrepreneur Petr Marek advises you to take a cautious approach when adopting AI in your business. You'll want a strong understanding of not only AI's capabilities but its limitations, he writes in a Forbes Business Council post.

"Take a step-by-step approach, testing AI tools in smaller areas of your operations before scaling up," says the blog by Marek, founder and CEO of Invoice Home, an invoice-generating platform designed for small businesses and entrepreneurs.

"This can allow you to gauge what works and where AI can add value without committing too heavily to a new technology that may not be fully aligned with your business needs."

Also, see this list of User-Friendly AI Tools and How AI Could Help Your Small Business.

Check Supplier and Vendor Contracts. Review agreements with your vendors and suppliers to identify potential to save money, such as new payment terms or discounts.

Even if there isn't a lot of immediate wiggle room right now, it's important to keep building these relationships throughout the year. 

Strong ties with your most valuable vendors and suppliers will improve your chances of negotiating more beneficial terms at a later time, and could be crucial to accomplishing your business goals.

Implement Energy-Saving Best Practices. Small business owners looking for ways to cut overhead costs at physical locations should assess their usage and ensure best practices for saving energy are implemented.  

According to cited research, businesses could cut overall energy use by at least 10 percent by turning off equipment and lights when not in use, switching to LED lights, and maintaining appliances and business equipment in peak condition.

Also, to reduce energy costs, be sure to optimize your HVAC system by adding new equipment when needed, using programmable thermostats, sealing doors and windows, insulating and cleaning ducts, and changing filters often.

Further, be sure to engage your employees in energy-saving practices -- their participation is critical and could have ideas on how to save more.

Keep Customers Top of Mind. As you identify and implement cost-cutting measures, be sure your strategies keep customers as the top priority.

Look at how your new strategies will affect customers, and remain committed to making customer service your top priority, writes Marek in the Forbes blog.

"Ensure you have a well-rounded team where everyone — from sales to operations to customer support — is trained to handle customer concerns with empathy and efficiency."