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Cost-Cutting Strategies for Your Home Business

Run a lean-and-mean home office with these five money-saving tips.

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With mounting energy bills eating into everyone's income and increasing the cost of doing business at home, it's a good time to look into ways to economize your home business. First we'll take a look at some ways to keep your energy costs in line, followed by some other ways to cut corners and save.

1. Cut Utility Bills

Now is a good time to compare the choices you have for providing heat and electricity in your home office. First, you may find immediate cost savings by switching from a conventional system to an alternative one like cutting down the energy demands on your furnace by heating your home with your wood-burning fireplace. In the summer, reduce air-conditioning costs by scheduling your work around the hottest hours of the day, using attic fans and skylights that open to let out the heat. Often you can do this without decreasing your productivity.

If you use propane or heating oil and have a choice of suppliers, compare prices. Find out if your home business qualifies for a business discount or business rate. If you can get a business rate, make sure it's actually cheaper than your residential rate. Some state utility commissions tilt in favor of consumers, but many offer business discounts.

Some utility companies offer free energy evaluations where a certified inspector will come to your home and assess your home and office energy-use. The inspector will show you where you can save resources and money and offer specific suggestions on how to do so. If a free inspection isn't available, it may be worthwhile to hire an energy auditor. You can locate an energy expert through the Residential Energy Services Network (RESNET).

You can calculate your home's energy use at Additional information can be found at The American Council for an Energy-Efficient Economy. For a specific weatherization assistance program, try Another information resource is The American Council for an Energy-Efficient Economy.

2. Make Your Home Energy-Efficient

A number of home improvements now qualify for tax incentives provided in the Energy & Transportation Tax Acts of 2005. Beginning January 1, 2006, you can recover up to 30 percent of the cost of solar water heaters and photovoltaic equipment in the form of tax credits. There are also credits for adding insulation or roof materials that'll reduce heat loss, as well as putting in geothermal heating and central fan systems. To learn more, check with your tax professional or get an overview at

To save on lighting, use compact fluorescent and halogen bulbs. They use less energy, produce more light, and last longer than ordinary incandescent bulbs. To find out if your existing office equipment and anything else that uses electricity is being an energy hog, buy a device that enables you to monitor energy usage. One such device is called Kill A Watt from P3 International.

When replacing equipment, look for office equipment that displays the Energy Star logo. Using such equipment can cut your electric usage by as much as 50 percent over other equipment. Learn more about EPA's Energy Star program at Replacing home appliances over 10 years old is also something to consider.

3. Get a Better Deal on Phone Services

Increasing numbers of people are saving money by using voice over internet protocol (VoIP), such as Skype. While quality of service varies, a friend of ours who lives outside the U.S. reports people hear him better when he's using using Skype than when he's on his land line. Other major VoIP providers are iConnectHere, Net2Phoneand DialPad.

You may also be able to save money on your cell-phone service. To get customers to switch services, providers are constantly competing with each other by offering lower prices. You can make a side-by-side comparison on sites like

Another money-saving option is to combine your phone and internet services. Check prices carefully, though. For example, we get SBC's bundling of local and long-distance service, but we're required to pay for tacked-on services we don't use. If you want to combine your phone and internet services, shop around to make sure you're actually saving on a bundled package.

4. Save on Office Supplies and Equipment

If you need to replace old equipment or replenish dwindling supplies, there are a number ways to cut costs.

  • Comparison-shop smartly. When buying office equipment, use shopping comparison sites, such as,,, www.Pricegrabber.comand To get the best prices, check out multiple comparison sites for each purchase. Also check out prices on eBay as well as other auction sites like Bidville, ePier, and iOffer. Items on less-used auction sites sometimes fetch lower prices than ones on eBay, or offer alternatives to bidding.
  • Buy in bulk. Chances are you'll save by buying items you use a great deal of in bulk at warehouse stores like Costco. For supplies you use in your home business that aren't available at office superstores or warehouse stores, consider joining other homebusiness owners to buy items directly from a manufacturer.
  • Buy generic store brands. Office superstores offer private label items such as mailing labels, ink cartridges and shipping envelopes at discounts over name brands. Chances are they're made by the same manufacturers.
  • Don't waste paper. Save on the amount of paper you use in your home office by using:
    • Personal information management software instead of making notes on paper,
    • The "print preview" feature in your word-processing or desktop publishing software to see what your printed page will look like before printing (this will reduce the number of test copies you'll need to make),
    • Your computer to send and receive faxed messages without having to produce printed pages,
    • Outdated stationery as notepads instead of throwing it away, and
    • Homemade packing material made from junk mail and other paper you normally discard that has been run through a paper shredder (also save shipping boxes, plastic foam balls, and other plastic packaging materials for reuse).

5. Pay Credit Card Bills Soon After They Arrive

Credit card companies will take as many as three days to log your payment, so your best bet is to pay soon after receiving your bill if you have the money in your account and can pay the balance in full. If you miss the closing date, you'll be charged the larger of a late fee (often $39) or interest on the old and new balance.

There are a number of ways you can cut costs and save money in your homebased business. With minimal effort, these five strategies will put a little extra money in your pocket now and add up to big savings for you and your business year after year.

Authors and career coaches Paul and Sarah Edwards authors of 16 books. Their latest book is a new edition of Making Money with Your Computer at Home. Free portions of their books are available at

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