How Cutting Costs Can Save Your Business
Part II of a two-part series on turning around a troubled company
It takes some serious belt-tightening to strengthen yourbusiness if your sales are down, your customers have disappearedand you're dipping into personal savings to meet the payroll.Here are some practical, easy-to-implement cost-cutting strategiesto consider as the summer winds down:
- Rent unused space and office equipment to another businessowner who needs it. You should be able to charge $20 to $35 perhour to rent out a desk, computer, printer, phone and supportservices to a needy entrepreneur. Advertise in your local paper.(We rent our conference room after-hours to a therapist who meetswith clients in our offices).
- Lock the office supply cabinet. Put a moratorium onbuying all but essential supplies. Ask employees to dig throughtheir desks, briefcases and pencil jars to use what they have onhand. Make use of all those free note pads and pens you'vecollected from trade shows.
- Consider refinishing office furniture rather than buyingnew. Companies like TheRefinishing Touch send a crew to your office to do the workon-site with water-based, nontoxic materials. "We do alow-tech business with very high-tech techniques," said MarioInsenga, president and founder of the Alpharetta, Georgia-basedcompany, which has refinished about 1 million rooms of furnituresince its founding in 1977. The company works for corporateclients, major hotel chains, universities and the federalgovernment.
- Review cell phone and pager use. Take away phones andpagers from employees who rarely leave the office or travel oncompany business.
- Review and update your business insurance coverage. Ifyou have sold a truck, car or other insured equipment, call yourbroker to remove it from your policy. Make sure you take advantageof good-driver, nonsmoking and any other special discounts you mayqualify for.
- Join a warehouse store to shop in bulk. Take advantageof all the membership benefits in addition to discount prices.Costco's executive business membership at $100 a year is anexcellent value. Not only can you visit the store an hour earlierthan the regular members, but you can also apply for a low-interestbusiness credit line and affordable credit card processingservices. While you are there, buy healthy snacks for youremployees. Free snacks are a cost-effective morale booster. Skipthe candy bars, and buy baby carrots and grapes in bulk.
- Limit business travel. Don't fly across the countryto meet with just one person. Set up several meetings with currentand prospective clients to justify the cost. Try videoconferencinginstead of a face-to-face meeting. (Kinko's offers thisservice, billed by the hour, at many of its stores).
- Print on both sides of the paper for internaldocuments.
- Use U.S. Postal Service Express and Priority mail servicerather than private overnight delivery services. The PostalService will pick up packages, just like the other guys. Pre-sortand barcode your mail to qualify for substantial discounts onpostage. The Postal Service also has a suite of products andservices aimed at small-business owners. Visit http://www.usps.com/smallbiz.
- Turn off lights, computers and air conditioners when youleave the office. Conserving energy saves money and resources.Change your lightbulbs to energy-efficient models.
- Solicit bids from new vendors and suppliers for thematerials you use to make or package your products. Compareprices and renegotiate with your current vendors if you are offereda better deal.
- Take advantage of early-bird discounts. Order holidaycards in September to receive free shipping from UNICEF. Other cardand gift companies have similar discounts for ordering early. SendThanksgiving cards this year to stand out from the crowd and beatthe Christmas rush. Forget expensive holiday gifts. Make smallcharitable donations in honor of your best clients, or send themgift certificates for movie tickets, tickets to a local playhouseor a family restaurant. Host a holiday open house instead ofsending expensive gifts.
- Buy ad space after the official closing deadline. Smallnewspapers and radio stations will often sell you unsold space andtime at a substantial discount. Have your printed ad or commercialready to be delivered and produced to fit the format.
- Save money on trips by staying with friends orrelatives. Take your hosts out to a lovely dinner with wine,which costs far less than a hotel room in a major city.
- Take advantage of special online-only discounts offered byairlines. "Web specials" can save you big bucks ifyou have a flexible schedule. Review your frequent-flier accountsoften, and use the miles whenever possible.
- Negotiate lower bank fees. In this competitive climate,no fees are set in stone. If you are a good customer with a fewthousand dollars in your account, tell the branch manager you willmove your money elsewhere if you have to pay for certified checks,traveler's checks or a safety deposit box.
- If things are really bleak, reduce the number of hourseveryone works by closing the office one day a week.
- Team up with other small businesses in your area to sharethe cost of a trainer if you need to schedule training thisfall.
Jane Applegate is a syndicated columnist and the authorof 201 Great Ideas for Your Small Business. Fora free copy of her "Business Owner's Check Up," sendyour name and address to Check Up, P.O. Box 768, Pelham NY 10803 ore-mail it to firstname.lastname@example.org.
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