7 ways to reduce small business costs


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7 ways to reduce small business costs

  1. 1. 7 Ways to Reduce Small Business CostsReducing small business costs is something every business needs to do, no matter the type orthe structure of the business. In today’s economic situation, it has become increasinglyimportant for small businesses to find ways to reduce overall costs. This helps to boost thebottom line of the business even when sales are lower. In some cases, it can help to restructure abudget and work from the ground up by analyzing all areas where costs are too high. In othercases, you may know exactly where the problem is and may be looking for a specific solution.There are many places you can cut costs. The seven biggest areas where you can save, ingeneral, are those listed here.1. Technology: The Good And Bad2. Consolidate Communications3. Reduce Business Credit Card Debt4. Analyze the Budget5. Market Your Business Smarter6. Manage Equipment Successfully7. Network with BusinessSmart Use of Technology to Contain CostsTechnology is one of the biggest cost factors within a business. The costs of technology areoften thought of as being too high. However, technology can actually be a tool for cost savings.You can save money by using technology to enhance the way you do business. In fact, todayyou can do some important things without spending a lot of money. Host teleconferences for your associates across the country or at multiple locations for virtually nothing. Avoid travel costs associated to such meetings. Use technology to speed up and manage payment services. You can use open source software to manage your business’s needs instead of purchasing high end products or using people to do simple tasks. You can even use remote desktop features, which allow you to employee independent contractors who work from home (thus cutting your labor costs significantly.)© 2011 Apptivo Inc. All rights reserved.
  2. 2. These are just a few ways you can cut your small business costs with the use of technology.Don’t see it has a high expense but rather an opportunity to save.FREE Time Tracking software at your fingertips.Consolidate Communications to Reduce Your CostsA simple way to save money is to consolidate your communications. You can do this innumerous ways, but one of the simplest is to get rid of your business’s landline. The use ofVoIP or Voice over Internet Protocol is one of the best services for businesses today. Thetechnology is far less expensive. You can make unlimited calls, even internationally for onesmaller fee. This is because this service works over the Internet.Evaluate if you really need that toll free number. Many big businesses today don’t have tollfree numbers. On top of this, many people today call using their mobile phone and theirminutes get charged anyway. So, they are not getting the benefits of a toll free number anyway.So, consider using a simple VOIP service for everything.Apart from the VOIP phone, every small business owner will carry a cell phone with a certainplan. You can also use free text messaging instead of making a call.Reduce Business Credit Card DebtCredit card debt is one of the most expensive aspects of a business that gets less attention.However, carrying a balance month to month on credit cards is a sure way to raise costs.Interest rates and fees add up quickly, leading to serious problems.Consolidate credit card debt into lower interest loans, or pay it off in full. Doing so could saveyour business thousands of dollars each year in interest, depending on the amount of debt youhave.Consider requesting a business line of credit from your bank. Typically these interests arelower than the credit card rates.© 2011 Apptivo Inc. All rights reserved.
  3. 3. Keep Your Budget Focused to Keep Costs Under CheckUse your business plan to help prioritize goals for the next five years. Then, focus on creatingan annual budget that focuses specifically on the goals. For example, if your business isworking towards goal A, prioritize your budget for those sectors of the business that cancontribute towards that goal. Other sectors of the business may face a budget reduction. Doingthis can help you to achieve large goals quickly and keeps costs in line.Market Your Business Smarter to Keep Marketing Costs LowNew marketing campaigns can be expensive. Even for a small business, though, marketing iscritical to establishing the success of the organization. Therefore, focus specifically onmarketing that costs less. Here are some ideas to consider. Cut costs by removing advertising no one sees anymore. Billboard ads, yellow page ads and similar types of advertisements are expensive and are easy for customers to miss. Market your business online through local ad placement services and listing services. Create a website to attract visitors to your business. Use social marketing methods to increase traffic to your site and to build your brand name. Communicate through email marketing rather than through snail mail. All you need is the customer’s email address and permission to keep them on the list. Market in unique ways. Gorilla marketing is a new type of technique that focuses on methods that get the attention of prospective clients.Marketing can be a large part of any small business’s budget. Avoid cutting it out completelyand instead focus on selecting marketing methods that add more value or a unique benefitinstead.Manage Equipment Effectively to Save CostEquipment can often be that thorn in a small business’s budget. If your business properlymaintains the equipment, it will last longer. When you do need to buy new equipment,purchase refurbished equipment instead of buying new equipment. Doing this could save yourbusiness thousands of dollars in the lifetime of the product. It can also help you to update oldtechnology or equipment that is costing you money, but in a less expensive manner.© 2011 Apptivo Inc. All rights reserved.
  4. 4. Barter with Other Businesses to Save CostYet another way to improve your business’s bottom line is by focusing on inexpensive ways toboost your business’s bottom line. For example, if you are a restaurant, offer free meals to thecompany that does the printing work for you. If you are a corporate office for an attorney, offerfree legal advice (at a cap) to a local business that manages your IT needs. This type ofbartering can actually boost your business’s bottom line by cutting out costs you can get forless or for free.Finding a way to cut costs in your business is an individual process. Examine where yourmoney is going first. Invest the time into this process so that you can learn where opportunitiesfor savings are. It may be time to evaluate contracts with vendors. Look for new ways to dobusiness, too, such as selling online. Doing this could help to improve your business’s budget,but it also can help you to consolidate and run your business more efficiently. Sometimes,having a new set of eyes on that budget can help. Take the time to investigate any area thatmay offer cost cutting opportunities.© 2011 Apptivo Inc. All rights reserved.