07/ 14/ 2005
by Vicki Gerson
Whether your business is successful or just making ends meet, you still have those never-ending monthly expenses. In today’s tight economic climate, every business owner must keep a watchful eye out for ways to reduce business expenses. With imagination, problem solving and negotiation, you can lower your expenses enough to actually feel the difference.
Principles to consider
Negotiate: Look around your business and think about what kind of deals you can negotiate. Do you have a cleaning service coming in once a week? Do you have a vendor selling you supplies regularly? If you’ve employed such services for several years, you might beneft from contacting the company and talking to them about a customer loyalty discount or a change to services that might save money. It never hurts to ask.
Research: Do your research before you make any changes. Whether you are purchasing products or services, someone in the marketplace is always willing to sell for less. However, before you make a change based on price, be sure the vendor provides the service you need. The lowest price might not bring the highest quality.
Barter: As a business owner, you probably pay a specific amount for garbage pickup. Is there any way to barter with one of the other businesses in your shopping strip, so you can share the cost of emptying the bin? If a restaurant nearby generates more garbage than you do, for example, such an arrangement could benefit both of you. Bartering can take many forms. A photographer in my hometown, for instance, receives free dance lessons for his daughters because he videotapes several dance recitals for the school’s owner at no charge.
Cost-saving tips
•Use toll-free numbers whenever possible: Why pay for phone calls if the company you need to contact has a toll-free number? Always ask if a toll-free number is available.
•Shop for savings on local and long-distance service: Salespeople wanting you to switch your phone service probably bombard you. Services and rates truly vary, but by doing your homework, you can get big savings. Be sure to check out package deals that throw in Internet service along with local and long-distance service.
•Use e-mail and faxes: Postage adds up. To avoid large postage bills, use e-mail and faxes whenever you can. Sometimes, a face-to-face meeting, personal note or phone call is necessary. But by e-mailing and faxing when possible, you could see a reduction in postage costs.
•Monitor office supplies: Do your supplies seem to be disappearing? All of the missing pads of paper, Scotch tape and pens add up. Don’t let employees take them home.
•Check out the warehouse stores: Because you need bathroom supplies, Kleenex and paper towels at your office, avoid purchasing these items separately. Shop for them in bulk at a warehouse store.
•Buy used or reconditioned equipment: It pays to check out auctions, going-out-of-business sales and closeouts for the equipment you need. The Internet also has buy/sell listings where you may be able to find business equipment. You’re sure to find great savings. However, remember, there are no warranties. Still, most companies that sell reconditioned equipment do provide a one-year guarantee on the products they sell.
•Avoid overnight deliveries: You will pay more for deliveries made in the morning. If you must have something the next day, the rate is less for afternoon deliveries. Be sure to check the prices of various carriers as well as the post office for the best rate.
•Analyze advertising costs: Where is your advertising? Are you using too many display ads that don’t bring business? Are you signing up for coupon mailers that don’t work? Keep track of where your customers are coming from and eliminate advertising that is too expensive or fruitless.
•Scrutinize invoices and credit card rates: Pay attention to bogus invoices for supplies you don’t receive or inaccurate invoices. Also, take time to investigate credit card rates charged to your business. Be aware that these processing companies offer different rates and terms. Don’t assume that they are the same.
Saving money and lowering business expenses isn’t as difficult as you may think; it just takes a little effort.
