Small business are constantly trying to bring in new business and increase revenue. But, it's also important to keep your expenses under control.
- Dial up a new telecom system. If you're not using a modern VoIP-based system for multiple phone and internet connections, you should--you may be able to save up to 50 percent on your equipment costs.
- Enforce a no-splurge business-travel policy. Try instituting a written policy that requires employees to seek out discounts or less-expensive alternatives. Then enforce it.
- Move IT to the cloud. Moving software and digital files off your desktop and into a virtual environment accessible through the internet can reduce the need to upgrade equipment and software every couple years.
- Make overtime a crime. Smart planning that expands full-time or part-time staff to soak up the overtime hours with straight-time wages can greatly reduce time-and-a-half pay.
- Use credit to earn vendor discounts. Take advantage of any early-payment discounts offered by your vendors. If they don't offer them, ask for them. Then tap your credit line to pay your vendors immediately. Here's why: A 2 percent discount for payment within 10 days equates to a 72 percent APR. At that rate, you're almost guaranteed to come out ahead by using your credit line.
Suzanne Kearns for the Money Crashers website offers even more ideas in this article, such as:
- Bring in Interns. Call your local college or business trade school and ask about using interns for warehouse work, filing, or other tasks. Sites like Urban Interns will post an internship opportunity for you and then make it visible to thousands of college students.
- Pool Purchasing Power. Find other small-business owners and collaborate with them to save money on supplies and other goods.
- Shop Around for Insurance. You should always be looking for the best rates, especially at renewal time. Consider using an independent agent for your insurance needs. Agents aren’t financially bound to any one company and can usually find great rates based on your unique requirements.
- Save Energy. Reduce your utility bills by using energy-efficient appliances, specifically ones with the Energy Star label, and compact fluorescent light bulbs. Request a free energy audit from your power company. An inspector will come out and do an assessment of your place of business and point out ways you can further reduce your energy bills.
The Simple Business Solutions Blog offers a huge list of 73 areas where you might find cost savings. Read down the list, stopping to consider each one and whether you might find a way to cut those costs. Our Tribute and TrulinX ERP software solutions can help you cut costs in many of these areas, including:
- Credit card processing
- Online payment processing (electronic funds transfer, ACH)
- Document printing costs
- Switch to sending electronic invoices/statements instead of paper invoices/statements
- Make purchases less frequently so that you can buy in bulk and obtain volume discounts
- And many more!
However, when budgets are tight, there's a right way to save money, and a wrong way. If you trim your spending in the wrong areas, you might hirt your business in the long run. Catherine Clifford offers these three cost-cutting mistakes to avoid in this post for Entrepreneur:
- Don't cut back on customer service.
- Don't chop your marketing budget.
- Don't scrap employee perks.
Do you agree or disagree with these three areas to avoid? Do you have a success story to tell about cost-cutting? Let us know in the comments below.