NFIB

9 Ways to Be More Frugal
03/ 28/ 2002

by Shannon Scully

1. Cut one service that you outsource, whether it's an office-cleaning person, a travel agency or a bookkeeper. You'll be able to save an extra $200 to $300 a month by taking on just one extra task. Of course, time is the most important commodity to many small business owners, so don't choose a task that is too time consuming on a daily or weekly basis.

2. Reduce your supply costs by buying in bulk, rather than running out to get things as they are needed. Have employees keep lists of things they need, but don't let them go overboard. You don't have to supply everyone with state-of-the-art pens and pencils or highlighters of every hue. Keep it basic, and you'll keep your costs down.

3. Try tracking your variable and fixed expenses for one month. Then don't spend any of your variable expenses the following month and see how much you save. You'll be surprised at the savings and at how much of your variable expenses you'll be able to cut out every month.

4. Organize your bill-paying and collection systems to maximize your company's cash flow. Accounting duties often come second in smaller companies, but failing to keep close tabs on the money that comes in and goes out can be costly. Deposit checks daily. Collect payments within 30 to 60 days, and consider giving discounts to customers who pay before 30 days. On the flip side, wait until the last minute to pay your own bills, so that you don't strain your cash flow. When able, pay bills electronically to make sure they're sent at the last minute yet still paid on time.

5. Maximize each employee's abilities. In other words--don't over-hire.

6. Make your office energy efficient. Turn out the lights in rooms that are not constantly occupied, such as break and conference rooms. And make sure the last person to leave at night turns off lights as well as computers and copiers. Replace older light fixtures with energy-saving fluorescent bulbs. Decide on a comfortable room temperature and then resist the temptation to touch the thermostat. Install a lock cover on the thermostat to keep employees from constantly adjusting the temperature as well. If possible, use laptops instead of desk computers, which use almost 90 percent more energy. Hang window treatments to cut down on heat in the summer and cold air in the winter.

7. Keep close tabs on your insurance costs. Be a nuisance to your insurance broker. Make sure that you're getting the best rates available and that you understand the necessity of all the policies you own.

8. Barter your company's services with other local companies or customers to keep from spending your cash. There are also several national Web sites that link companies interested in bartering. If negotiated carefully, bartering can save money. Find a local barter group in your area, or check out these Web sites: www.allbusiness.com, www.bartertrust.com as well as www.ubarter.com Be sure to check out the tax implications before joining any of the groups.

9. Save money on rent by negotiating your office lease and always consult legal counsel to ensure the document is fair. Don't get locked into long-term contracts with high penalties for breaking the lease. During bleak economies, many companies that go out of business will sub-lease their space--a cheaper option for companies that remain.

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Calculate your costswww.ubarter.com The American Savings Education Council and the Employee Benefit Research Institute have teamed up to establish the Choose to Save Education Program, to help you plan for tomorrow. At their Web site, www.choosetosave.org , you'll find over 100 calculators to help you with an array of financial planning issues, from "Should I pay off debt or invest in savings?" to budgeting, insurance and more.

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Keep abreast of your portfoliowww.choosetosave.org Edgar Online is a source for Securities and Exchange information. Go to www.edgar-online.com to keep track of public companies and executives and for instant notification of public offerings.

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This article originally appeared in the September/October 2001 issue of MyBusiness Magazine, NFIB's member magazine.

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