25 Ways to Save Money in Your Homebased Biz Add 'financial wizard' to your entrepreneurial repertoire with these money-saving home biz tips.

One of the major benefits of having a homebased business is thelow overhead, but that doesn't mean you don't need to be ascost-conscious as any other business owner. After all, money savedgoes right to the bottom line in the form of increased profits.Here are 25 ways you can pinch pennies--and even dollars--in yourhomebased business.

Buying and Spending Smart

1. Buy used furniture. Used office furniture can bepurchased for a fraction of its cost new. Check newspaper ads,bankruptcy sales and even new furniture dealers who frequently havetrade-ins or repossessions they're willing to sell at deepdiscounts. Another great place to shop for used furniture andequipment is the surplus office at a nearby college or university.If the school doesn't have a surplus office listed, call themain information number to find out which department handlesdisposing of used items.

2. Pool your purchasing power. Find other small-businessowners--not necessarily homebased--and team up to buy supplies inbulk. You'll save money on the cost of the materials, as wellas the shipping. "I get together with an accountant friend anda computer specialist, and we order basic items like paper in largequantities, usually five or more cases at a time," says LynRichards, owner of Dog Logic, a resource center for large- andgiant-breed dog owners and breeders in Manchester, New Hampshire."We get a lower price per ream, and the shipping ends up beingfree because we buy so much."

Don't limit group-buying partners to noncompeting companies:"Coopetition" (cooperation among competitors) is one ofthe hot trends in business today. Consider group purchasing withbusinesses that offer the same or similar services as you but thatperhaps target a slightly different market or geographic area. Besure all agreements are clearly spelled out in writing. Clarifyupfront who will actually make the purchase, how the goods will bedelivered, when the others will reimburse the purchaser, and howany problems with quality or service are to be handled.

3. Save on shipping by taking it with you. If you'renear your suppliers, pick up your order yourself--or perhaps have afriend or family member do it for you, suggests Sarah WilliamsSteinman, president of Casco Bay Herb Co., an herbal soapmanufacturer in Cumberland, Maine. For example, Steinman'shusband travels throughout the Northeast. "He keeps me updatedas to when he might be near one of my suppliers," she says."He often travels through the town where my olive oil supplieris, and he'll pick up a few hundred pounds of oil on his wayhome. That saves me about $75 in shipping."

Caution: Pick up supplies yourself only when it truly saves youmoney. If it's taking you away from a revenue-producingactivity, you're not really saving.

4. Buy wholesale and ask for commercial discounts. Joinwarehouse buying clubs and never pay retail price to any supplierwithout first asking for the wholesale rate.

5. Negotiate discounts for long-term buying commitments.If you regularly use a particular item but can't buy in bulkbecause you lack storage space, ask your supplier for a bulk rateas long as you commit to purchasing a certain quantity over aspecified period of time.

6. Buy at trade shows. Many exhibitors offer showdiscounts or will discount their booth samples to avoid having toship them back to their warehouse. "Sometimes I can buysamples for a discount at a wholesale show and take them with me,which saves on both the product and the freight," Steinmansays. Attend the shows in a vehicle large enough to transportwhatever you might purchase.

7. Barter and trade. Find businesses that offer productsand services you use and offer to trade. Be sure you're veryspecific on the details and agree on the respective value of whatyou're trading. The value of bartered goods and services may betaxable; check with your accountant. As an option, consider joininga barter exchange, which is an organization that facilitatesbartering among its members. A list of exchanges can be found onthe InternationalReciprocal Trade Association Web site.

8. Shop for insurance annually. Don't justautomatically renew your business, health, automobile or otherinsurance. Ask your agent to review your coverage, do a riskassessment and make suggestions on how you might be able to savemoney. Insurance companies are always introducing new products,especially for the homebased business market, and what was the bestdeal for you last year may be topped by something else thisyear.

9. Ask for a better price. When you're shopping forany type of goods or services, always ask for a better price. Theworst that can happen is the supplier will say no--but they mightsay yes.

10. Don't pay bills until you have to. Protect yourcredit rating by paying on time, but never pay early (unlessyou're getting a discount for doing so). Let that money sit inyour account earning interest as long as possible.

11. Pay bills online. At the very least, you'll savetime and postage. In addition, many companies offer discounts tocustomers who pay online.

12. Ask your suppliers for cash and early-paymentdiscounts. Make payment terms a part of your price negotiation;many suppliers routinely offer discounts for cash or fastpayment.

Energy & Computer Spending Savvy

13. Buy and use energy-efficient products. Look for theEnergy Starlabel; it was created by the U.S. Environmental Protection Agencyand the U.S. Department of Energy to help reduce unnecessary energyuse and air pollution by labeling energy-efficient, cost-savingproducts for homes and offices.

14. Request an energy audit and off-peak usage discount fromyour utility company. The energy audit is free, and they'llgive you plenty of tips to conserve energy and reduce your powerbill. For the discount, get a printout of your energy consumption."Ask for a discount when your peak usage coincides with theirlow-point usage," Lyn Richards says. "Many powercompanies will give a 2½-cent-per-kilowatt-hour discount whenyou do this."

15. Review your telecommunications rates twice a year.Telephone companies (local, long distance and cellular) are alwaysintroducing new rate plans, so make sure you're getting thebest one for your particular usage. Ask your current company toreview your account and let you know if you're getting theirbest deal. Then contact two or three other companies and ask themfor a bid based on your calling patterns.

16. Operate your vehicle efficiently. Combine trips andavoid unnecessary travel. Maintain your vehicle for maximum gasmileage, which means doing things like keeping tires properlyinflated, removing unnecessary weight, keeping filters clean, andgetting periodic engine tune-ups.

17. Save money by avoiding losses. Protect yourelectronics from power surges and sags, and backup your computersystem regularly. Replacing computer equipment and recovering datatakes time and money, notes Tully Smith Callaway, owner ofHospitality Host, a Web site developer and Internet host in WinterPark, Florida. He recommends avoiding the expense and downtime byinvesting in a quality surge protector and an uninterruptible powersupply. You should also backup your data regularly and store thosefiles in an off-site location.

18. Install antivirus software and keep it updated. Everycomputer is at risk of viruses these days, Callaway says;practicing "safe computing" can save you the cost ofrecovering lost data and the related downtime-not to mention thedamage to your customer relations if you inadvertently pass along avirus to your customers.

Making Business Sense (and Cents)

19. Charge back expenses to clients. Professional serviceproviders do this all the time; it can work for just about anybusiness. When you incur expenses that aren't a regular part ofproviding your product or service, figure the additional costs intoyour customers' bills. It's a great way to recoup costswithout increasing prices.

20. Form marketing alliances. Get together with othersmall businesses that target the same market, and combine yourmarketing efforts. For example, Steinman's been invited to teamwith a natural body-care company to exhibit at a large nationaltrade show this fall. "Instead of spending $2,500 for a boothshowing just their line, they've selected a few complementarycompanies to share the booth," she says. "For $400,I'll get exposure in a show I [couldn't otherwise] afford,and they'll offset their costs." You can also team up withother small businesses on advertising and promotional efforts; allit takes is a little creativity and cooperation. As with buyinggroups, however, make sure you put everything in writing.

21. Promote yourself. Use sound public relations andpromotion techniques to gain exposure in your community and in themedia that target your prospective customers. This approach isgenerally more effective and much less expensive than advertising.And always capitalize on one of the cheapest and most effectivemarketing methods of all: word-of-mouth.

22. Don't overlook any tax deductions. In addition tobeing able to deduct a portion of your rent or mortgage interestand utilities as a business expense, you can also deduct apercentage of various home maintenance expenses, along with aportion of the cost of services such as house cleaning and lawncare. Check out the Internal Revenue Service's Web site, or check with aknowledgeable tax advisor for more information.

23. Take advantage of professional association services.Richards points out that many associations offer a wide range ofbenefits to members, such as group insurance and supplierdiscounts. Ask organizations for a list of member benefits, and besure to watch for new benefit announcements.

24. Insist on prompt payment. Don't let your clientscost you money by keeping what they owe you in their bank accounts.Set and enforce your credit terms, and take prompt collectionaction when appropriate.

25. Remember that time is money. When you can save time,you're saving money. Use effective time management techniques,time-saving devices and outsourcing to make the best use of yourtime.

This article first appeared on Entrepreneur.com in September,2000.

As a freelance writer specializing in business, marketing andentrepreneurship, Jacquelyn Lynn has been pinching pennies in herhomebased office for 14 years.