When it comes to a small business, a penny saved truly is a penny earned – continually cutting costs, even in tiny ways, goes directly to your bottom line. And there are more ways to save money in your business than you even have time to learn about.
So we’ve chosen four areas that are ripe for cost savings if you follow our advice. And as you get into each area, you can probably come up with more of your own opportunities for savings:
1) Make easy moves to reduce office expenses
Look all around the office and you can find all sorts of expense-trimming options.
Metering postage is an often-neglected area that can yield great savings. One example: using a digital system by our sponsor Pitney-Bowes, a long-time industry leader, can save you at least 2.5% on your overall postage costs. The meters can keep track of exactly how much you are spending, ensuring that you never pay more than you need to for postage – and eliminating unnecessary trips to the post office.
And if you haven’t gotten around to it, start refilling and recycling your printer-ink cartridges through a pickup outfit such as Cartridge World. You can save about 50% on the cost of purchasing each new cartridge – and feel “green” as well by cutting your waste material.
2) Get tech savvy
Transfer your phone service to the internet through what’s known as Voice-Over Internet Protocol. The quality of the technology is getting better and better, and the costs are out-of-this-world low. “We reduced our phone bills from over $500 a month in long distance to just $25 a month for each of our four employees, which has saved us thousands of dollars a year,” says Lindsay Olson, partner in Paradigm Staffing, a New York City recruiting firm.
Ordering computers for you or your employees? Check out some of the certified refurbished models available at most major computer manufacturer sites. It might not matter to you that the computer is last year’s model or has a dent or scratch, as long as you’re getting a good deal and it has all the functionality you need it to have.
3) Think of creative uses of barter
Trade goods and services with another entrepreneur and save on some of the things you need to run your business. Are you an accountant who needs brochures designed? Maybe you can offer to do a graphic designer’s taxes this year in exchange for a brochure design.
Aggressive expense cutters should consider barter because it can “reduce cash output and, if done in an equitable manner, improve community business relationships,” notes Leif Smith, president of Personal Best Consulting, based in Hilliard, Ohio.
Lea Ellermeier Nesbit, for instance, performed some marketing work for her landlord in exchange for the office space for her Dallas-based startup business, Lingualcare. And in the company’s next location, she bartered rent for a small equity stake in her firm.
4) Enlist your employees’ help
If two minds are better than one, that axiom can apply to cost-busting at your small business as well. If you have employees, consider opening your books to them to elicit their ideas for pinching pennies. An important corollary could be to offer profit-sharing to them as well.
“Once employees figure that waste is coming right out of their pockets, they’ll watch every penny,” advises Lanny Goodman, a consultant and head of Management Technologies Inc., in Albuquerque, N.M. “The challenge then will be convincing them when you need to spend money on new computers or other expenditures necessary for future growth.”
Our Bottom Line
The only limit on cutting costs is your imagination. But if you follow our advice only in these four areas, you’ll notice a bottom-line impact immediately in your small business finances.