50 Money-Saving Biz Tips

On a shoestring budget (and what entrepreneur isn't?), itreally pays to scrimp and save. Just in case you've forgottenthe value of a hard-earned penny, we've come up with a slew ofmoney-saving ideas to boost your business's bottom line-fromcutting your legal bills to inexpensive ways to draw in customers.Though some tips will save you more money than others, the endresult of your overall spendthrift strategy could add up to abundle.

Penny-Pinching Promotions

1. Piggyback your advertising. Including advertisingmaterial in other mailings, such as in invoices, saves postage andother costs, says J. Donald Weinrauch, co-author of The FrugalMarketer. Likewise, make the most of your point-of-purchaseopportunities by tucking coupons, newsletters or other promotionalfliers in the bag with customers' purchases.

2. Be a good neighbor. Split advertising and promotioncosts 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 sellcomplementary goods or services.

3. Ask the people you know for help. The kind of supportyou'd most like to get from your contacts is referrals-thenames of specific individuals who need your products and services.So go ahead and ask! Your contacts can also give prospects yourname and number. As the number of referrals you receive increases,so does your potential for increasing the percentage of yourbusiness generated through referrals.

4. Got a happy customer? By telling others whatthey've gained from using your products or services inpresentations or informal conversations, your sources can encourageothers to use your products or services.

5. Make a special TV appearance. Local cable TV stationsoften have very reasonable advertising rates at time slotsthroughout the day and night. Though you won't necessarilyreach prime-time viewers, you will make an impression where itcounts-in the comfort of potential customers' homes.

6. Offer expert advice. Teaching a class, speaking at acommunity meeting, or writing an article for a local paper not onlymakes you look like an expert but garners low-cost attention foryour business.

Internet Ideas

7. Start your search engines. Research your market andfind potential visitors for your Web site by looking through Usenetnewsgroups (forums on the Internet where people post messages forpublic viewing) and special-interest groups related to your targetmarket, product or service. Or, if you have America Online, visittheir Small Business Center, which includes libraries ofsmall-business information you can download at no charge.

8. Cut costs when setting up your online store. Thinkgoing online has to cost an arm and a leg? You can start out byselling items for next to nothing on online auction sites likeeBay andYahoo!Auctions. If you want to create a professional storefront,there are several "Web site in a box" solutionsavailable, usually for a low monthly fee.

9. Start chatting. Find newsgroups that cater to youraudience, and join the fray. "I didn't start[participating in online discussion groups] to generate business,but as a way to find information for myself on varioussubjects," says Shel Horowitz, owner of Northampton,Massachusetts-based Accurate Writing & More and author ofseveral marketing books, including Grassroots Marketing. "Butit turned out to be the single best marketing tool I use. It costsonly my time. [One] list alone has gotten me around 60 clients inthe past five years." Always include your URL in yoursignature, but don't do any hard selling-most groups will banyou immediately. Instead, provide useful information that'llmake people will want to click on your site.

10. Spread the word yourself. Are you letting people knowwhat your URL is? Try putting it on your letterhead and businesscards and in e-mail signatures-wherever potential visitors arelikely to see it. Include it on employee uniforms, any promotionalitems you give away, all press releases, in your Yellow Pages adand on company vehicles.

Location Logic

11. Get a suite deal. You don't have to run youroffice full-time from an executive suite to benefit from itsservices. Many homebased entrepreneurs find executive suites meet arange of needs, including access to a private mailbox and areceptionist to answer or forward calls to your home office. Visitthe Office Business Center Association International Website for more information.

12. Be mobile. While the costs of establishing apermanent retail location can be steep-you may spend up to $100,000or more, with leases spanning three to 10 years-carts, kiosks andtemporary spaces can be an easier way to get a foot in the doorwith a lot less risk. The upfront investment for a kiosk or a cartranges from just $2,000 to $10,000, according to Patricia Norins,publisher of Specialty Retail Report. License agreements forcarts and kiosks are shorter and are usually renewed every month upto one year depending on the location. This arrangement makes iteasy for entrepreneurs to "come in, try it out for a month,and if their product isn't working, shift to a new product lineor close up shop and move to a new location," Norins says.

Office Overhead

13. Buy recycled printer cartridges. Check Google or yourYellow Pages for a local recycled printer cartridge supplier. Or ifyou want to mix your charitable instincts with your printing needs,visit www.lasermonks.com, a remanufactured printing supplycompany run by a group of monks in Wisconsin who, after businessexpenses are paid, donate their profits.

14. Fill it out for free. Instead of buying forms at yourlocal office supply store or spending time creating them yourself,you can find tons of free forms online that you can download,customize and print. Our free forms on Formnet can get youstarted.

15. Get free software. Visit Download.com to tryhundreds of software products for free through trial downloads,freeware and limited versions of the full product. Visit ourComplete Guide to Software to find the best software options forsmall businesses, including many links to the free trials of thosebrands. Another tip: If you haven't found what you'relooking for through Download.com or our software guide, check outthe manufacturer's site. Most offer free trial downloads.

16. Buy used equipment. Save up to 60 percent by buyingused computer equipment, copiers and office furniture from storessuch as the nationwide Aaron Rents & Sells chain. Auctions andnewspaper classifieds are other good sources of used equipment.

Insurance Intelligence

17. Save by association. When looking for insurance,check with your trade association. Many associations offercompetitive group insurance.

18. Be prepared. Buying appropriate insurance upfrontsaves money in the long run, says Jeanne Salvatore of the Insurance InformationInstitute, a nonprofit organization in New York City. Considerwhat situations would be catastrophic to your business and protectyourself with adequate insurance. "Disaster recovery,"says Salvatore, "is one area where business ownersshouldn't scrimp."

19. Make a foul-weather friend. By arranging for analternative place to run your business in case of a major disaster,you may be able to save on business interruption insurance, advisesthe Insurance Information Institute. For instance, you couldarrange with a firm in the same industry to use their facilities incase of damage, and vice versa.

20. Check up on your medical insurance. Before choosing amedical insurance carrier, ask for information on past claims andthe loss ratio of paid claims to premiums, advises the Council of Better BusinessBureaus in Arlington, Virginia.

21. Raise your deductible. Raising the deductible on yourinsurance usually lowers your premiums. Even if you end up havingto pay the deductible, it's likely to be less than the amountyou save.

Employee Economics

22. Aim to lease. Employee leasing-in which you turn overyour work force to a professional employer organization that leasesyour employees back to you-can save you substantial cash onemployee benefits, says Bruce Steinberg at the American StaffingAssociation (ASA). For referral to a leasing company near you,visit the ASA online at www.staffingtoday.net.

23. Go with the flow. Rather than paying for employeeswho sit idle when business is slow, consider hiring temporaryemployees to handle surges in business.

24. Make experience count. Get free or low-cost help-andgive local college students a chance to learn the ropes-by hiringinterns.

25. Use independent contractors. Employers generallydon't have to withhold or pay any taxes on payments toindependent contractors. But be very careful that your independentcontractors fit the definition provided by the IRS or you couldface penalties.

26. Commission your sales force. Overhead, salaries,incentives, training costs, fringe benefits and expenses add upwhen you're hiring your own sales representatives. Contractingindependent manufacturers' sales reps, paid on commission only,is less expensive-and often equally effective.

Shipping Savings

27. Clean up your mailing list. The U.S. Postal Servicewill clean up your mailing list for free, correcting addresses,noting incomplete addresses and adding ZIP+4 numbers so you'llbe eligible for bar-code discounts.

28. Prune that mailing list even more. The DirectMarketing Association offers this checklist of cost-cutting ideas.Eliminate nonresponders and marginal prospects; print "AddressCorrection Requested" on the face of your mail; investigateco-mingling your mail with that of other small mailers to takeadvantage of discounts available mainly to large mailers; andstockpile mail to build up larger volumes.

29. Be an early bird. Send mail early in the day, and youcan usually expect to get one- to two-day delivery for the price ofa first-class stamp.

30. Shop around for an overnight courier. Overnightdelivery rates for the major couriers are competitive; however, ifyou're willing to wait a few hours-or even an extra day-youcould save.

Tax Tactics

31. Mind some petty pointers. Don't get carelessabout your petty cash account. "Though you don't needreceipts for expenses under $75, you should still track theseexpenses since they can add up," advises Crouch.

32. Hire your children. If your children are at least 14years old and pay their own taxes, it pays to take advantage oftheir lower tax bracket. "You can essentially transfer incomefrom your business to them [to save money]," says Scott.

33. Take a stand on taxes. If your business is new in theneighborhood, you may be at a higher tax rate than those who havebeen there longer. "Go to city hall to determine what yourneighbors are paying, and use this to negotiate a betterrate," says Collins. "Expanding businesses can oftennegotiate with community authorities, who want them to stay in townrather than move and take jobs elsewhere."

34. Homebased? Don't overlook crucial tax deductions.In addition to being able to deduct a portion of your rent ormortgage interest and utilities as a business expense, you can alsodeduct a percentage of various home maintenance expenses, alongwith a portion of the cost of services such as house cleaning andlawn care. Check out the IRS's Web site, or check with a knowledgeable taxadvisor for more information.

35. Get out on the town. If much of your business isconducted at restaurants or you find yourself driving toclients' offices, make sure you take those deductions. If youentertain clients or potential clients to discuss a current orfuture project, you can deduct a portion of your entertainmentcosts. To qualify for this deduction, you must maintain a log ofentertainment-related expenses you plan to deduct. For mileage, youcan deduct 37.5 cents per mile in 2004. This figure usually changesannually, so check with your accountant at the beginning of eachyear.

Financial Focus

36. Make credit comparisons. If you tend to run unpaidbalances on your credit cards at the end of the month, shop for acard with a low interest rate. If you pay in full, it's moreimportant to avoid an annual fee and look for a longer graceperiod. "Often credit card issuers waive the annual fee orreduce the interest rate if you ask," says Scott. "Justtell your credit card company you've had several solicitationsfrom other companies with more favorable interest rates or noannual fees, and ask if they will reduce yours."

37. Avoid cash advances. "Credit card companiesusually charge an upfront fee of up to 2 percent of the advance,with interest accruing immediately," says Scott.

38. Bank on an early deposit. Make bank deposits earlyenough in the day so you get credit (and start earning interest)that day.

39. Get checks in the mail. Ordering your checks from aprinting company often costs less than getting them from a bank.Options include Checks in the Mail and DesignerChecks.

40. Form a buying alliance. Join with another business ora trade association for bulk purchasing discounts.

41. Take it with you. If you're near your suppliers,pick up your order yourself-or perhaps have a friend or familymember do it for you, suggests Sarah Williams Steinman, presidentof Casco Bay Herb Co., an herbal soap manufacturer in Cumberland,Maine. For example, Steinman's husband travels throughout theNortheast. "He keeps me updated as to when he might be nearone of my suppliers," she says. "He often travels throughthe town where my olive oil supplier is, and he'll pick up afew hundred pounds of oil on his way home. That saves me about $75in shipping." Caution: Pick up supplies yourself only when ittruly saves you money. If it's taking you away from arevenue-producing activity, you're not really saving.

42. Be reluctant to give credit. If you do extend credit,thoroughly check the client's credit background, says Collins.For less-than-creditworthy accounts, Collins advises consideringthe following actions: Collect cash in advance; send partialshipments; request letters of credit, personal guarantees and apledge of assets; take out credit insurance; or think aboutfactoring (see below).

Professional Policies

43. Query your consultants. The professionals you workwith regularly are often easy to bargain with, thanks to therapport 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 waysto cut your premiums, reduce billable hours or avoid hugeretainers. You might also barter your services.

44. Be a legal eagle. When hiring an attorney, make sureyou have a written fee agreement to prevent surprises. It shouldinclude an estimate of the time to be spent on your case andspecify what's covered in the fee-including typing orcopying-and what is not.

45. Learn something new. Rather than pay a consultant towrite your press releases, for example, hire one for an hour or soto show you how to do it yourself.

46. Run from the law. "Avoiding lawsuits is a bigfactor in business success," says Holmes Crouch, author of 18tax books. "Even arbitration can get expensive." The bestalternative: Try to work out any problems before they grow to thepoint that attorneys get involved. "Don't ignore anywritten or phone complaints."

Buying Brainpower

47. Stretch your budget with barter. Swapping one productor service for another is a good way to avoid cash outlays-andunload slow-moving inventory. If you'd rather not bargain withother businesses directly, hire a commissioned barter broker(listed in the Yellow Pages under "Barter"), or join acommercial barter club or exchange. The National Association ofTrade Exchanges (NATE) is a clearinghouse for member exchangesacross the country, allowing business owners to swap just aboutanything with anyone. Participants typically receive "tradedollars" for their goods or services, which are brokeredacross cities nationwide with the help of NATE. Visit NATE atwww.nate.org.

48. Time your payments. Ask suppliers if they givediscounts for early payment. If not, it's to your advantage topay your bills-including utilities, taxes and suppliers-as late aspossible without incurring a fee, advises Scott. "The longerfunds are under your control," he says, "the longerthey're earning a return for you rather than someoneelse."

49. Join an association. Many trade and businessassociations have reasonable membership fees and offer discounts oneverything from insurance, travel and car rental to long-distancephone service, prescriptions and even golf course fees.

50. Seek at least three bids on everything. Even mundanepurchases merit shopping around. If you quote a competitor'slower price, a supplier or vendor will often match that price towin your business.

Contributors include Jacquelyn Lynn, Ivan R. Misner, ChrisPenttila, Guen Sublette and Laura Tiffany