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In a volatile economy, on a shoestring budget (and what entrepreneur isn't?), it really pays to scrimp and save. Just in case you've forgotten the value of a hard-earned penny, we've come up with a slew of money-saving ideas to boost your business's bottom line-from joining a prepaid legal plan or logging on to the Net to auditing your commercial lease and even unplugging your coffee maker. Though some tips will save you more money than others, the end result of your overall spendthrift strategy could add up to a bundle.
1. Piggyback your advertising. Including advertising material in other mailings, such as in invoices, saves postage and other costs, says J. Donald Weinrauch, co-author of The Frugal Marketer (Amacom). Likewise, make the most of your point-of-purchase opportunities by tucking coupons, newsletters or other promotional fliers in the bag with customers' purchases.
2. Wait till the last minute. To keep print advertising costs down, consider "remnant" advertising. Many magazine publishers offer last-minute, unsold, discounted ad space.
3.Be a good neighbor. Split advertising and promotion costs with neighboring businesses. Jointly promote a sidewalk sale, or take your marketing alliance further by sharing mailing lists, distribution channels and suppliers with businesses that sell complementary goods or services.
4. Make a special TV appearance. Local cable TV stations often have very reasonable advertising rates at time slots throughout the day and night. Though you won't necessarily reach prime-time viewers, you will make an impression where it counts-in the comfort of potential customers' homes.
5. Go back to school . . . and introduce yourself to the head of your local college business program. Many of these programs build community work into their curriculum and can provide valuable assistance in writing or revising your business plan-or doing market research-for free. For more information about such programs, contact the Small Business Advancement National Center at (501) 450-5300 or at (http://www. sbanet.uca.edu/).
6. Be open to suggestions. For free market research, just ask your customers. Set up a suggestion box at your place of business (or online), suggests Weinrauch. Ask customers to fill out their names and addresses along with their suggestions, and you've got the makings of a mailing list, too. While you're at it, ask your employees for cost-saving suggestions.
7. Follow the gurus. Jay Conrad Levinson is one of many marketing gurus to offer free marketing advice on the Web. Check out his free weekly Web magazine, Guerrilla Marketing Online, at (http://www.gmarketing.com).
8. Offer expert advice. Teaching a class, speaking at a community meeting, or writing an article for a local paper not only makes you look like an expert but garners low-cost attention for your business.
9. Tune in to the Bells. Shop around for the best long-distance deal. For a comparison chart of major long-distance carriers' features, services and discounts, send $5 and a self-addressed, stamped envelope to the nonprofit Telecommunications Research & Action Center, P.O. Box 27279, Washington, DC 20005.
10. Dial toll-free. Before calling a vendor, supplier, or even a customer, check the toll-free directory at (800) 555-1212 to see if they have a toll-free number. Or check out AT&T's toll-free number directory online at (http://www.tollfree.att.net/dir800/).
11. Send just the fax. Rather than waste paper, transmission time and effort on a fax cover page, use a Post-it note or simply write at the top of the first page you're sending.
12. Set the standard. Send faxes in standard rather than fine mode to cut transmission time.
13. Collect some stamps. If you have free local calling, consider faxing all your local correspondence to save on postage, suggests David L. Scott, author of The Guide to Saving Money (The Globe Pequot Press).
14. Wait till after hours. Send outgoing faxes after business hours and benefit from significantly lower long-distance rates.
15. Give up your car phone. Use a pager instead. You'll save on costly cellular bills, but you can still be reached in an emergency.
16. Take the electronic avenue. By setting up an e-mail box on the Internet, you can virtually eliminate many courier, overnight and postal fees. Get an e-mail account either through an Internet service provider (ISP) or a commercial online service. For further savings, read and compose all your e-mail offline.
17. Start your search engines. Research your market and find potential visitors for your Web site by looking through Usenet newsgroups (forums on the Internet where people post messages for public viewing) and special-interest groups related to your target market, product or service. Or, visit America Online's Small Business Center, which includes libraries of small-business information you can download at no charge. For more extensive online information, use Yahoo's Business Resources (http://www.yahoo.com).
18. Advertise on the Net. Check out the Internet Advertising Resource Guide (http://www.voyager.net/adv/internet-advertising-guide.html), a Web site that includes information on everything from online advertising to how to get to other useful sites.
19. Cut costs with a cyberstore. More than 50 cybermalls offer advertising space on the Net. The Branch Mall (http://www.branchmall.com), for example, helps you set up a Web page in a virtual mall for under $1,000.
20. Create your own Web site. Visit the Web Marketing Info Center at (http://www.wilsonweb.com/rfwilson/webmarket) for links to Web marketing resources, as well as information on creating your own site for less than $1,000.
21. Advertise on someone else's site. Many Web site owners will provide a link on their page to your Web site for a fee. For information, visit the IPA Online Advertising Index at (http://www.netcreations.com/ipa/adindex/).
22. Get free software. Dial into one of the many 24-hour online software stores that let you download freeware and low-cost shareware. (It's easier if you have a high-speed modem.) Look for freeware and shareware through your online service provider, directly through the Internet or through online bulletin board services.
Leasing Retail or Office Space
23. Look over your lease. "Lots of people don't realize they're being overcharged on their commercial leases," says Greg Gimba, managing partner for Anet Consulting Group Inc., a global strategic marketing firm in Daytona Beach, Florida. Gimba recommends auditing your lease agreement regularly-with the help of an attorney familiar with your type of lease. Pay special attention to the stated square footage and "shared costs" you pay for maintenance of common areas (which you should ensure are actually being maintained).
24. Lower your overhead. Share office overhead expenses with other business owners by locating in an executive suite.
25. Get a suite deal. You don't have to run your office on site to benefit from an executive suite. Many homebased entrepreneurs find executive suites meet a range of needs, including access to a private mailbox and a receptionist to answer or forward calls to your home office-all for about $150 to $250 per month.
26. Tune in to your cellular phone bill. "You'd be surprised at the number of errors," says Gimba. "Often, you're charged for calls that didn't go through."
27. Put things in a better light. Using fluorescent rather than incandescent light bulbs conserves energy and lowers your electric bill.
28. Use your entrepreneurial clout. "Utility [companies] have a stake in the economic development of a community and often offer special rates to entrepreneurs," says Pete Collins of New York City-based Coopers & Lybrand LLP.
29. Unplug your coffee maker. Save electricity by turning off the coffee maker in your break room, suggests Scott. Pour the fresh coffee into a large thermos instead.
30. Don't give 'em so much garbage. Many businesses overpay to have their garbage picked up daily, says Gimba. "Half the time, your containers aren't even full," he says. "Reduce costs by reducing service to every other day."
31. Buy recycled laser printer cartridges. Check the Yellow Pages for a local recycled laser printer cartridge supplier.
32. Buy recycled batteries. The Battery King in Parkersburg, West Virginia, offers recycled batteries at up to 25 percent off regular prices. Customers can mail in their old laptop computer or camcorder batteries to have the cells replaced; the company ships worldwide.
33. Time your payments. Ask suppliers if they give discounts for early payment. If not, it's to your advantage to pay your bills-including utility, tax and supplier-as late as possible without incurring a fee, advises Scott. "The longer funds are under your control," he says, "the longer they're earning a return for you rather than someone else."
34. Draft a savings plan. Make your laser printer cartridges last longer by using draft mode to print interoffice memos and other less important documents.
35. Form a buying alliance. Join with another business or trade association for bulk purchasing and other discounts.
36. Cut down on copies. Monitoring your use of copiers saves on supplies and maintenance.
37. Get reacquainted with your inventory. What with warehousing, handling and insurance, inventory carrying costs often exceed 25 percent per year, says Collins. To recoup some of those expenses, present the product in a different light: "Restaging an old product is usually less expensive than introducing a new one," says Weinrauch. "Often all that's needed is to update its image, make improvements or create a spinoff."
38. Junk it. Get rid of unsold, damaged or returned merchandise at year-end, advises Holmes Crouch, author of 18 tax books. Advertise a year-end "fire" sale and save the advertisement for IRS documentation; then whatever you don't sell, give to the dump and get a receipt. "The lower your year-end inventory," says Crouch, "the higher your cost of goods sold-and the lower your reported net income and taxes."
39. Buy computers by mail. You'll pay for shipping, but the savings of not having to pay state sales tax often makes up for it.
40. Buy used equipment. Save up to 60 percent by buying used computer equipment, copiers and office furniture from stores such as the nationwide Aaron Rents & Sells chain. Auctions and newspaper classifieds are other good sources of used equipment.
41. Consider leasing. If you put lots of mileage on your business vehicle and expect to drive it for less than five years, try leasing. (Beware, however, of mileage limits and nonrefundable deposits, which may make leasing less attractive.) Leasing frees up capital and enables you to drive a luxury car for less.
42. Put your best fleet forward. Ask your dealer if you qualify for a cost-saving fleet incentive program. Though such programs are typically geared toward fleets of 10 or more cars, some dealers will work with small-business owners.
Insurance and Employee Benefits
43. Save by association. When looking for insurance, check with your trade association. Many associations offer competitive group insurance.
44. Shop around. At the end of each insurance policy period, review your business's needs and get several bids before renewing your policy.
45. Be prepared. Buying appropriate insurance upfront saves money in the long run, says Jeanne Salvatore of the Insurance Information Institute, a nonprofit organization in New York City. Consider what situations would be catastrophic to your business and protect yourself with adequate insurance. "Disaster recovery," says Salvatore, "is one area where business owners shouldn't scrimp."
46. Make a foul-weather friend. By arranging for an alternative place to run your business in case of a major disaster, you may be able to save on business interruption insurance, advises the Insurance Information Institute. For instance, you could arrange with a firm in the same industry to use their facilities in case of damage, and vice versa.
47. Check up on your medical insurance. Before choosing a medical insurance carrier, ask for information on past claims and the loss ratio of paid claims to premiums, advises the Council of Better Business Bureaus in Arlington, Virginia.
48. Raise your deductible. Raising the deductible on your insurance usually lowers your premiums. Even if you end up having to pay the deductible, it's likely to be less than the amount you save.
49. Make an adjustment. It often pays to adjust your health insurance stop-loss amount so that you pay a higher percentage, capped at a lower amount. Though in a worst-case scenario you could end up with more out-of-pocket expenses, your premiums will be lower.
50. Review your rates. "Often, business owners are classified for workers' compensation insurance under the wrong rate by their insurance company," says Gimba. "As a result, you may not be getting the proper discount."
51. Have employees chip in for health care. Giving employees more "ownership" of health benefits increases their appreciation of your health-care offerings and takes some of the costs off your hands.
52. Don't leave well enough alone. Sponsoring a wellness program for your employees can cut your health-claim and insurance costs. Promote a bike-to-work week or publish an employee newsletter of health tips, for example.
53. Offer perks. Often, it's the little things that make employees happy-and they don't have to cost a bundle. Consider buying movie tickets for local theaters at a bulk discount, getting a corporate rate at your local gym, or offering flextime.
54. Aim to lease. Employee leasing-in which you turn over your work force to a professional employer organization that leases your employees back to you-can save you substantial cash on employee benefits, says Bruce Steinberg at the National Association of Temporary and Staffing Services (NATSS). For referral to a leasing company near you, contact NATSS.
55. Go with the flow. Rather than paying for employees who sit idle when business is slow, consider hiring temporary employees to handle surges in business.
56. Provide cross-training. If employees can handle more than one job, you may not need extra temporary help during peak periods, suggests Collins.
57. Make experience count. Get free or low-cost help-and give local college students a chance to learn the ropes-by hiring interns.
58. Use independent contractors. Employers generally do not have to withhold or pay any taxes on payments to independent contractors.
59. Commission your sales force. Overhead, salaries, incentives, training costs, fringe benefits and expenses add up when you're hiring your own sales representatives. Contracting independent manufacturers' sales reps, paid on commission only, is less expensive-and often equally effective.
60. Don't touch that dial. Never use hotel or pay phones for long-distance calls before inquiring about the charges, says Scott. If charges are too high, ask to be connected to your regular long-distance company.
61. Press the pound (#) key. If you're using a charge card to call from a hotel, avoid costly "connect" surcharges for each call by placing all your calls consecutively. Rather than hanging up after each call, press the pound key. After you hear the dial tone, dial the next number without redialing your account number.
62. Prepay when you're away. "Prepaid phone cards can be a good deal," says Scott. "You typically pay a flat fee of 20 cents per minute or less, no matter what time you call." Not only do you avoid a surcharge for each call (as with regular calling cards), but you gain significant savings if most calls are made during weekday business hours.
63. Consider a consolidator. Save a bundle by booking
hotel reservations through a reselling consolidator. Altamonte
Springs, Florida-based Central Reservations Service, for example,
offers a discount of
10 percent to 40 percent on accommodations at no charge to callers.
64. Keep looking for lower rates. Always ask hotels if they give discounts for business travelers or any groups you may belong to. Once you arrive at your hotel-but before telling the clerk you have a reservation-ask about the lowest available rate. The rate they quote may be even lower than the one you were told over the phone.
65. Cash in on car rental discounts. Sometimes smaller firms offer better deals than national chains. Ask if you qualify for any discounts-for AAA or frequent flier program members, for example.
66. Avoid a collision course. Don't pay the high cost of collision and comprehensive insurance through a car rental company if you don't have to. Not only does your personal auto insurance policy probably cover you, says Scott, but many credit cards include car rental insurance if you rent a car using that card.
67. Call on all car rental firms. It's never too late to negotiate for better terms: "Even if you already have a reservation, it pays to do some last-minute shopping at the airport," says Scott. Cancellations and excess inventory may mean one agency can cut you a better deal than another.
68. Fly for free. Build your airline free-travel vouchers by using a credit card that offers frequent flier miles. Be sure, though, you're disciplined enough to pay off your card every month.
69. Don't give up on a discount. If you call an airline and learn all their discount seats are sold out, don't give up. "Airlines limit discounted seats on each flight, often based on the number of seats they expect to sell at full price," says Scott. "If a flight doesn't fill as rapidly as expected, they might open additional discount seats." It could pay to wait for a day or so and try, try again.
70. Clean up your mailing list. The U.S. Postal Service will clean up your mailing list for free, correcting addresses, noting incomplete addresses and adding ZIP+4 numbers so you'll be eligible for bar-code discounts.
71. Be an early bird. Send mail early in the day, and you can usually expect to get one- to two-day delivery for the price of a first-class stamp.
72. Make it a priority. Take advantage of the U.S. Postal Service's Priority Mail $3 flat-rate 2-pound mailers. They often arrive in two days and cost less than competitors' two-day rates.
73. Go for bulk. If you mail in bulk, consider a bulk-mail permit. The permit costs $85 per year but means lower postage costs of 22.6 cents per piece.
74. Shop around for an overnight courier. Overnight delivery rates for the major couriers are competitive; however, if you're willing to wait a few hours-or even an extra day-you could save.
Entertainment, Gifts and Taxes
75. Dine at a discount . . . dis-creetly. Use discount dining cards, such as Schaumburg, Illinois-based Dining Ã¡ la Card. You can save 20 percent at restaurants nationwide without showing coupons or cards at the restaurant; instead, you get a monthly refund check in the mail.
76. Waste not. Don't throw away your old computers and office equipment. Donate them to a nonprofit organization or school and get a tax write-off.
77. Give what it takes. Business owners can take a 100 percent write-off of each business gift up to $25. Compare that to the 50 percent write-off for business meals and entertainment, and gift-giving has never looked better. Itemize any gifts-including the name of the recipient and the general nature of your business with that person-and remember that husband and wife are treated as one recipient, advises Crouch.
78. Mind some petty pointers. Don't get careless about your petty cash account. "Though you don't need receipts for expenses under $75, you should still track these expenses since they can add up," advises Crouch.
79. Hire your children. If your children are at least 14 years old and pay their own taxes, it pays to take advantage of their lower tax bracket. "You can essentially transfer income from your business to them [to save money]," says Scott.
80. Take a stand on taxes. If your business is new in the neighborhood, you may be at a higher tax rate than those who have been there longer. "Go to city hall to determine what your neighbors are paying, and use this to negotiate a better rate," says Collins. "Expanding businesses can often negotiate with community authorities, who want them to stay in town rather than move and take jobs elsewhere."
81. Make credit comparisons. If you tend to run unpaid balances on your credit cards at the end of the month, shop for a card with a low interest rate. If you pay in full, it's more important to avoid an annual fee and look for a longer grace period. "Often credit card issuers waive the annual fee or reduce the interest rate if you ask," says Scott. "Just tell your credit card company you've had several solicitations from other companies with more favorable interest rates or no annual fees, and ask if they will reduce yours."
82. Avoid cash advances. "Credit card companies usually charge an upfront fee of up to 2 percent of the advance, with interest accruing immediately," says Scott.
83. Bank on an early deposit. Make bank deposits early enough in the day so you get credit (and start earning interest) that day.
84. Establish a link. By linking your checking account with another account at your bank, you can usually avoid checking charges, says Scott.
85. Get checks in the mail. Ordering your checks from a printing company often costs less than getting them from a bank. Options include Checks in the Mail at (800) 733-4443, or Designer Checks, which displays a variety of business checks complete with payroll stubs that you can order through the Internet at (http://www.hotnew.com/checks/).
86. Query your consultants. The professionals you work with regularly are often easy to bargain with, thanks to the rapport you've developed with them. Ask your insurance agent, accountant or attorney how you can cut back on their costs. You'd be surprised at the suggestions they might offer on ways to cut your premiums, reduce billable hours or avoid huge retainers.
87. Choose a prepaid plan. Small-business owners can benefit from a prepaid legal plan for taking care of basic legal needs, says Theresa Meehan Rudy at the Washington, DC-based nonprofit legal reform group HALT. For about $10 to $12 per month, legal plan members typically receive help planning a will, free review of legal documents and vendor contracts, and unlimited phone advice, plus reduced rates on other legal services. For information, contact the National Resource Center for Consumers of Legal Services in Gloucester, Virginia.
88. Be a legal eagle. When hiring an attorney, make sure you have a written fee agreement to prevent surprises. It should include an estimate of the time to be spent on your case and specify what is covered in the fee-including typing or copying-and what is not.
89. Learn something new. Rather than pay a consultant to write your press releases, for example, hire one for an hour or so to show you how to do it yourself.
90. Run from the law. "Avoiding lawsuits is a big factor in business success," says Crouch. "Even arbitration can get expensive." The best alternative: Try to work out any problems before they grow to the point that attorneys get involved. "Don't ignore any written or phone complaints."
91. Get ready to retire. Taking stock of your retirement
plan options can significantly reduce your tax bill. Not only are
your contributions tax deductible, but the money in your retirement
account compounds without taxation until withdrawn after
retirement. "One of the simplest plans to consider is a
Simplified Employee Pension-Individual Retirement Account
[SEP-IRA]," says Raymond Russolillo at Coopers & Lybrand
LLP. SEP-IRAs allow business owners to make tax-deductible
contributions to employees' retirement accounts of up to 15
percent of employees' incomes. Other retirement plans include
sharing Keoghs and money-purchase pension plans. Russolillo recommends working with a financial planner to determine the best plan.
92. Play the money market. Selecting a money market mutual fund, rather than a checking account, for your longer-term financial needs often yields a greater return. "Look for a mutual fund with low annual operating and other fees," advises Scott. Beware, however, of brokers who recommend frequently switching funds since this often means a new sales fee.
93. Opt for a discount. Using a discount broker (such as Charles Schwab & Co. Inc., Fidelity or Quick & Reilly Group Inc.) to buy and sell securities can save you 50 percent or more on stock transactions compared to full-service brokerages.
Buying, Bartering and, Getting Paid
94. Stretch your budget with barter. Swapping one product or service for another is a good way to avoid cash outlays-and unload slow-moving inventory. If you'd rather not bargain with other businesses directly, hire a commissioned barter broker (listed in the Yellow Pages under "Barter"), or join a commercial barter club or exchange. The National Association of Trade Exchanges (NATE) is a clearinghouse for member exchanges across the country, allowing business owners to swap just about anything with anyone. Participants typically receive "trade dollars" for their goods or services, which are brokered across cities nationwide with the help of NATE.
95. Barter for better compensation. Barter can also be an innovative way to supplement your employees' compensation. For example, you could offer your sign-making services to a barter exchange pool and, in return, receive the services of a local dentist. Then, instead of paying for dental insurance for employees, you could provide them this valuable perk-without paying any cash.
Guen Sublette is a writer who avidly recycles used envelopes and paper clips to keep costs down in her Redondo Beach, Califonia, business.
96. Join an association. Many trade and business associations have reasonable membership fees and offer discounts on everything from insurance, travel and car rental to long-distance phone service, prescriptions and even golf course fees.
97. Be reluctant to give credit. If you do extend credit, thoroughly check the client's credit background, says Collins. For less-than-credit-worthy accounts, Collins advises considering the following actions: Collect cash in advance; send partial shipments; request letters of credit, personal guarantees and a pledge of assets; take out credit insurance; or think about factoring (see below).
98. Consider the factors. Factors-companies that essentially buy and then liquidate a company's accounts receivable-provide an option to tied-up money, says Collins. For more information, look in the Yellow Pages under "Factors."
99. Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote a competitor's lower price, a supplier or vendor will often match that price to win your business.
100. Consult Uncle Sam. Call your nearest Small Business Administration (SBA) office or Small Business Development Center for information on no or low-cost financing or growing a business. Also check out the SBA's Web site, which allows you to download numerous useful publications for free, at (http://www.sbaonline.sba.gov).
The SBA has also published a free magazine in conjunction with Pacific Bell, called Small Business Success, on streamlining your business operations. The 88-page guide (available by calling 800-848-8000) includes information on online marketing and keeping up with the competition.
Aaron Rents & Sells, (703) 256-0654, fax: (703) 750-0789;
Anet Consulting Group Inc., (800) 611-0660, (904) 426-5194, email@example.com;
The Battery King, (800) 666-2296, BatteryExp@gnn.com;
Central Reservations Service, (800) 873-HOTEL, (http://www.reservation-services.com);
Coopers & Lybrand LLP, 1301 Ave. of the Americas, New York, NY 10019, (212) 259-3399;
Holmes Crouch, c/o National Book Network, (800) 462-6420, (408) 867-2628;
Dining Ã¡ la Card, (800) 253-5379, (http://www.dalc.com);
HALT, 1319 F St. N.W., #300, Washington, DC 20004, (202) 347-9600;
IB Your Office, (888) 950-1700, (http://www.ibyo.com);
Insurance Information Institute, (800) 942-4242;
National Association of Trade Exchanges, fax: (216) 732-7172;
National Association of Temporary and Staffing Services, 119 S. Saint Asaph St., Alexandria, VA 22314, firstname.lastname@example.org.