Money Saving Tips for Small Businesses

10 Easy Ways to Cut Business Expenses

By: Pam Grundy

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The business environment seems to be just getting worse and worse with the current economic crisis driving the nation (and world) deeper into the red.Every board room across the country is discussing budget cuts, lay offs, and other ways to reduce business costs and increase frugality. Small businesses, though perhaps hit hardest by the lack of cash flow, do have some advantages over their mega-corporate cousins, and a savvy small business owner will be able to find the way to turn the current economic hardship into an opportunity to implement necessary, often overdue changes to their enterprise. Here's a list of 10 saving tips for small businesses:

Energy Efficiency

A good place to start slashing costs would be in the energy sector. Trade out whatever obsolete, current-guzzling installations you may have, for more energy efficient varieties. Change lights, heating or cooling units, ventilation units, etc., for better ones.
Check out this page at Business.Gov to see a list of ideas on how to make your small business more energy efficient; the site is the official business link to the US government, so count of finding valuable information and ideas there.

Go Open Source

Don't let the hegemons of the software industry scare you into believing that, should you go for a free alternative to their products, you'll end up stranded in a netherworld of poor performance, failing programs, and absent support.
Open source software can slash costs very significantly, and still be reliable. Consider packages like OpenOffice; also, look for whatever free programs are offered by the major producers. Microsoft offers Microsoft Office Accounting Express free of charge. Whatever it is, make sure you're not paying ridiculous prices for a software pack you could be getting for much cheaper or for free elsewhere.

Reconsider Your Marketing Strategy

Are you wasting money on ridiculous billboards that fail to convey your message, and which nobody even notices in the first place? If so, stop! Do some alternative marketing research: get in touch with the guerrilla marketing spirit. Word-of-mouth marketing works, and so do email campaigns—as long as they're wisely executed, especially in the case of email marketing. Hitch a ride on the back of other advertisers, and include other advertisements in your own marketing material; these strategic alliances can save you and a partner money all at the same time.

Improve Phone Usage

If you've got a business with a high volume of calls, both incoming and outgoing, then consider changing to VoIP, an internet-based alternative for phone services. VoIP is really only wise if you have a very steady, fast, and reliable internet connection, in which case it's tremendously advisable: the difference between a VoIP and a regular phone call can be astronomical, with international calls via phone dwarfing rates via VoIP. Lastly, always call toll-free when you can; ask if the person or company you're calling has a toll-free line.

Change Your ISP

If you're a small business, why should you be using a big ISP? You shouldn't. Smaller ISP businesses will offer you much better rates, without hurting your image at all. Also, you'll be able to build a more personal, effective relationship with a small ISP, which will save you time and money in the long run as you deal with the issues that arise with having a website and running email accounts and marketing campaigns.

Switch to Online Payments

Instead of keeping your merchant account, with its ubiquitous processing and statement fees, reduce business expenses by switching over to an online payment service, like PayPal or MoneyBookers. Of course, these services have per transaction fees, so you'll need to do some math before committing. Generally, the difference over the long run is in the small business owner's favor, as hassles from wire transfers and having to pass along confidential information are eliminated with a simple online account.

Freelance and Outsource

Don't obsess with having every employee in the office: this will mean more electricity, ink, water, and food bills on your account! Use freelancers and be willing to outsource, especially in accounting and tech services. Of course, you may have to run your freelancers on a trial period basis, but before long you ought to be able to come across some reliable outsourced talent. With time, this change will cut business costs considerably.
A great website to help you find freelance workers is Elance. You can also read our article "Increase Profits by Outsourcing Your Work."

Travel Wisely

Don't spend unnecessary dollars on luxurious travel arrangements; tighten up, and travel with sense. Share private jet charters, car pool when possible, surf online for fare discounts and special deals, and use frequent flyer miles and other benefits programs to your advantage. Share hotel rooms and travel arrangements with other employees going on the same trip, when possible. Also, don't frequent restaurants all the time: buy supermarket food and use the mini-kitchen in your hotel room.

Interns and Family Members

Why pay wages when you don't have to? There are always possibilities for getting college students in search of credit to serve as unpaid interns, or to get your kids to work in return for housing and food. These will reduce business costs like few other measures.

Sublet Unneeded Space

If you're leasing your office space, then consider subletting any part of it you're not using to a third party in order to get some additional cash flowing on the side. Unneeded and unused space not only represents an additional cost in terms of square footage in your lease, but furthermore may represent additional costs as lighting, water, and other devices are used in this space for absolutely no constructive purpose at all.

Conclusion

Hopefully at least a few of these money saving ideas for your small business come as new ideas to the readers out there looking to cut costs. The basic idea is to remain efficient, and to remain creative. Don't dwell upon ancient practices simply because that's the way it has always been done; believe in yourself to find more efficient solutions.
Go to the US Small Business Administration website for inspiration on some more ideas and practices to keep in mind.

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Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." - Will Smith
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