Posts Tagged ‘cutting costs’
Keeping Your Small Business Costs Low
Monday, April 21st, 2008
It’s often hard enough to run a successful business, whether you’re a small-to-medium business owner or a large multi-national. Making it even more difficult are the costs involved if you’re a small business looking to either launch a new product or service, or even your company website. Thankfully there are a host of options and resources available for you to take advantage of, and very often they’re either free or extremely cost-effective.
Use Networking Opportunities
As a small business owner, you’ve probably heard of networking, and may even have attended specific networking events. Bringing together like-minded business people of similar backgrounds, networking can be a great way of promoting your business in a very cost-effective manner. Instead of having to spend thousands on advertising, you can often pick up new clients or affiliate partners for your products at networking events.
Look for Non-Profit Options
Another excellent method of keeping your business costs low is by using non-profit companies. These can offer you sound business advice, from starting a business to maintaining a business plan, as well as the legalities involved in running a business. Additionally, because they’re non-profit, you won’t have to pay exorbitant fees to gain this advice - very often it’s free. Non-profit companies and groups are normally made up of business experts in your field as well, who have enjoyed their own success and simply wish to help others become successful too. Check with your local SCORE organization or Chamber of Commerce for details of what’s available in your area.
Small Business Administration
Across America, one of the very best resources for businesses looking to keep their costs low is the Small Business Administration, or SBA. Set up over 50 years ago, the Small Business Administration has been pivotal in helping many new businesses get off the ground, as well as continue to trade afterwards. Acting as a completely independent agency of the U.S. Federal Government, the SBA can help small businesses find financial aid packages at far lower costs than traditional business loans, as well as put the owners of these businesses in touch with experts who can help them grow. Additionally, there is a dedicated section on the SBA website that caters solely for new start-ups, and as such is an invaluable resource for small business owners.
Use Your Local Resources
While the SBA offers excellent online resources (as well as various offices throughout the US), it’s not always convenient if you want to sit down and discuss your options with someone. This is where your local information outlets can come into their own. Economic development organizations are a good example, and can be found statewide. Much like the SBA, these organizations can offer both technical advice as well as details on how you can raise capital for your business. They also offer groups similar to networking set-ups, where you can speak with experts in your particular niche.
Tags: Accounting, business costs, cutting costs, danny brown, Finance and Accounting, saving money, tips
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Oil prices are going up–ways to cut down on the business energy bill
Monday, March 31st, 2008
With the cost of oil rising to unprecedented levels, businesses are seeing energy costs rise as well. While you may not have a direct link in your business to oil, the high price per barrel cost is impacting your business in some fashion.
As fuel costs increase, so do transportation costs whether by air, sea, or land. Transportation companies often times add on a fuel surcharge or a fuel fee. If you see one of those make sure to ask about it and check your agreement to ensure the added charge is legitimate. If it is legitimate, make sure when the price of oil comes back down that the fuel surcharge disappears.
There are many ways for you to lower your energy costs although you may not be directly impacted by the cost of oil. No matter what business you are in there are a number of ways you can cut your energy costs.
The most obvious is automobile or truck driving. If you need to do any driving for your business makes sure it is well planned out and that you are not wasting trips. If you have a series of deliveries to make spend the time to map them out in sequential order. If there are times or deadlines to deliver by call your customers and see if they would accept an early delivery. Who wouldn’t want that? The result of your trying to be efficient and save some money is a happier customer!
If you ship products to your customers offer discounts for multiple items per package if you can. Also help them to plan their orders if you can to cut down on shipping costs. If they regularly order from you twice a month perhaps you could talk with them about moving it to one time a month to save on the shipping costs for each of you.
In terms of facilities you can save energy as well. Have automatic timers on your lights, particularly in break rooms and bathrooms. Make sure if you have vending machines that you have energy efficient models.
In the office make sure printers, copiers, and other electronic equipment are shut off each evening and particularly on Friday nights. You may be surprised how many of your employees leave on various types of electronic equipment.
Turn down your thermometer and encourage your employees to adopt a layered approach to dressing for work. While you don’t want to be seen as a Scrooge, explain to your employees how much money you spend on heat and electricity. You also want to make sure you have energy efficient bulbs in all light sockets and use fluorescent if possible.
There are a number of ways to save on energy costs around your business. Make sure to pay attention to the details and let your employees and vendors know about your effort, they may surprise you with some great ideas of their own.
Tags: advice, cutting costs, energy bill, larry Slusser, saving money, tips
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Little Cost-Cutting Tips that Add Up to Big Savings
Thursday, March 20th, 2008
With mounting bills and a nationwide economic downturn, it’s no wonder why more and more businesses are looking for new ways to cut their monthly costs. Well, the good news is there are plenty of small things you can do to keep your cash flow healthy. And, as we all know, all those little cost-cutting ideas can add up to some serious savings!
Consider using a VoIP phone service - If your monthly phone bill is in the hundreds every month, consider slashing it down to a single or double-digit bill. Voice over internet protocol (VoIP) companies like Skype, iConnectHere, Net2Phone, and DialPad allow you to dial phone numbers over the internet, and talk and listen using a microphone headset. Other VoIP companies like Vonage and Lingo let’s you use your existing phone number and phone to make calls. Typically, there is no monthly fee and calls are free to other VoIP users, or a very low rate (starting at 2 cents a minute) to cell or LAN-line phones.
Be more energy efficient - Replace your existing light bulbs with compact fluorescent or halogen bulbs. They last longer, give off more light and use less energy than traditional incandescent bulbs. When replacing office equipment, look for the Energy Star logo, as these products not only reduce electric use by over 50 percent, but you might qualify for a tax cut as well. To learn more, visit www.EnergyStar.gov . Also, turn electronics and computers off when you leave the office at night and be sure to turn off lights as much as possible. If you don’t already have one, get an electronic thermostat and lower the office temperature in the evenings and on the weekends.
Consider a payment service - If your website has an online store, chances are you have a merchant account with high monthly fees, statement fees and discount percentages. That can all add up to an unnecessarily-large bill at the end of each month. You may want to think about switching to a payment service like Paypal or Clickbank - there’s just a low per-transaction fee. Depending on the business, this switch alone can save you hundreds of dollars a month!
Cut down on waste - Many businesses are unknowingly overspending by not recycling. Consider the lunchroom: do you provide disposable plates, cups, napkins and utensils for employees to use each day? If so, you might consider stopping those purchases and asking employees to bring in and recycle their own plates and utensils. Also, the amount of paper that gets wasted in the average office can amount to hundreds of dollars a year. Consider using electronic memos, notices and bulletins, and start a recycle bin and use those to print faxes or make in-house copies.
Be creative; there are plenty of other ideas that you can implement to add up to big savings. Take a look around the office and at your daily routine and see what can be minimized or reduced in order to save money. It won’t take long before you have your own list of money-saving ideas!
Tags: Carrie Hinkel, cost cutting, cutting costs, energystar.gov, saving money, Voip
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Reduce Carbon - Source Locally
Monday, February 11th, 2008
One of the key points that governments worldwide are trying to get over to businesses of all sizes is to become greener. With pressure from consumer groups and health authorities, making sure everyone is as environmentally friendly as possible is big news for the political parties. It’s not just the big corporations either - everything from small one-person businesses to small-to-medium companies are being targeted. So how can you make sure you fall into line?
One of the best ways to do this is to source locally. This works on two levels as well - not only is it a great way to reduce your carbon footprint, it also enables you to support other local businesses. And the flip side to that is that they can then offer you their support, making it a win-win situation all around.
Because you’re cutting down on the amount of physical miles your products need to travel when you source locally, the vehicle emissions will obviously be a lot lower than traveling to a different state or county. And it’s not only you that will benefit from this - sourcing locally will also mean you don’t have suppliers adding even more carbon fumes to the atmosphere.
After all, although a supplier might not be classed as part of your company, you’re still indirectly involved in their pollution, since you’re the recipient of one of their deliveries. So what are the best ways to source locally?
There are many ways to help you source whatever you need locally, and you may actually be surprised by the ease in which you can do this. Some of the best ways include:
* Use your local directory. If you’re a business that needs specialized products or services, you may indeed need out-of-area help. However, there may be a local company that you’re unaware of that can provide you with what you need.
* Arrange or attend a local business network meeting. Again you might be surprised by what’s actually on offer in your community. And you’ll be getting your own name out there at the same time.
* Ask existing local suppliers if they can recommend anyone’s services.
There’s another good reason to source locally to help reduce your carbon footprint. Because the environment is obviously such a big political issue, parties are using it as voting power. Part of their promises is that they will come down strong on companies who don’t meet the required level of green awareness.
Therefore, if you don’t meet these requirements, you could find yourself with a large fine, or in the worst-case scenario, have your business license suspended until you come up to scratch. So now might be the right time to start seeing what’s in your local area supplier-wise - it could save you more than you think.
Tags: cutting costs, danny brown, going green, Product Sourcing, source, sourcing locally, suppliers
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Spending Money to Make Money: Costs you Cannot Afford to Cut
Monday, February 4th, 2008
Cut your operating costs. Run your business lean. Bootstrap-spend your way to success. All of these mantras involve minimizing spending and if you follow them all, you won’t make any money. There are times in the life of your business where you are going to have to spend money to make money.
Also, there are some aspects of your business that you just can’t afford to cut out; the cost to your business is too high. The key to success in business is having the wisdom to know when and what to invest in and when and where you can cut expenses without hurting your enterprise.
How Do I Know If Something Is Critical Or Not?
If I cut this out, how will it impact my business? This is the key question to ask yourself before you get too far down the road planning to cut out something. Whether you are contemplating a reduction in product or service offerings, or looking at laying off an employee, look at how will the reduction impact your business. In the short term the answer may be that the impact is negative - but what does the long term look like?
If you were in the wagon wheel industry as a marketer or reseller, you needed to transition when Henry Ford invented the automobile. Those who failed to shift their strategy paid the price. While this example is extreme, the lesson is still valid - change happens and you and your business need to be aware and ready for change.
If I Make This Investment What Will the Payoff Be? How Long Will It Take to Realize the Benefit?
Most people in business have heard of the term ROI, or return on investment. While there are many math calculations to help you figure out the ROI of a capital investment, there are other more subjective factors to consider in the return on your investment.
If you are considering a new product offering, make sure you have an accurate gauge of the demand for the new product or service. While this can be difficult to estimate, look at similar industries or technologies and study how the demand developed and trended over time.
If the investment you are considering is a capital investment, will it result in additional sales or increased efficiency? For example, you may be considering the purchase of a new multi-function printer for your business. If you are able to double side print your documents, improve your use of toner, and save on spending at your outsource copy company, the investment will save money for your operation. If you are having to spend time to go to the copy facility and use gas to drive there, be sure to calculate a cost for your time and the vehicle fuel and maintenance. It is important you calculate all costs into your decision matrix so you can make the best decision possible for your enterprise.
Remembering to ask these three questions when considering cost-reduction tactics can save you time, money, and your sanity in the long run.
Tags: advice, cost cutitng, cutting costs, larry Slusser, money, saving money, tips
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Improving Your Online Profitability
Thursday, January 24th, 2008
To improve the profitability of your online business there are only two options: raise revenues or cut costs. There are many different avenues and objections to raising revenues. The focus of this article will be on how to lower the costs of your business, which will improve the profitability of your online enterprise.
In most businesses, including ones online, the two largest cost factors are cost of labor and cost of materials. Labor costs include wages paid, benefits such as insurance and 401K savings plans, taxes, and any other benefits that are directly tied to you and your employees.
Look at your bookkeeping records and print off every cost you have had related to labor for the last 6 months. How much is the total? Are there quarterly costs that you need to average out into a monthly amount such as bonuses or quarterly premiums? Do you see any surprises?
If you have any employees, take these labor costs both direct (e.g., wages, bonuses, etc) and indirect (e.g., health insurance premiums) and total them up per employee. You will find the amount staggering when you total it up. Employees cost money, there is no doubt of that; but many are worth the cost depending on your industry and reliance upon quality staff. You need to look at the revenue an employee generates or the costs they are saving you versus what you are paying total to have them on your staff.
Say you don’t have any employees - what do you analyze then? If you pay yourself, you need to analyze how much that is and what it is costing your company. While you won’t lay yourself off you can find some ways to make sure you are spending your time and your company’s time effectively and making the most money or saving the maximum you can in costs for your company.
If you are doing your own accounting, web content writing, marketing, writing your own e-books, and dabbling in web design, you need to consider outsourcing some of those tasks. There are many quality providers of these services that can be found online for a very reasonable price. How best is your time spent for your enterprise? That is really the question to ask yourself about your skills and that of your employees (if you have any). If you are the best at sourcing new products, then that is where you need to spend your time, not doing the books or struggling to design a new web page.
For example, let’s say you source a new product line of 50,000 widgets that cost $5 a piece. Because of your superior research and negotiation skills, you lower the cost to $4.50 per widget and you are able to sell them for the same price as before. You just added $25,000 to your bottom line!
Material costs include the cost of your raw goods or the cost to you for the products you offer. You have heard it said that one of the best business tips is to buy low and sell high. This somewhat overused anecdote couldn’t be more accurate and it is critical you buy right no matter what you are selling. This principle holds true for housing, cars, and all sorts of manufactured goods. If you can buy for the right price, you can offer a great price to your customers, who will buy a lot and be happy because you are giving them a great deal.
Spend your time on your business, not in the middle of it. You want to know what’s going on and keep track of things, but you can’t do absolutely everything involved in your growing online business. Stay big picture, make good strategic decisions, and always, always, buy low and sell high.
Tags: boost profits, boosting sales, cost cutitng, cutting costs, E-Commerce and E-Business, larry Slusser
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How to Trim the Fat Off Your Insurance Bills
Thursday, January 3rd, 2008
It’s no secret that the cost of most types of insurance is on the rise–from liability coverage for your business to car or health insurance. You can’t afford to go without coverage because an incident can put you out of business. But you can fight against price hikes back by taking certain steps.
Property and liability coverage
Protect your equipment and other business property as well as insure against claims by third parties for injury on your premises with a business owner’s policy (BOP). Shop around for adequate coverage at the lowest price. Before your policy is up for renewal, work with an insurance agent to get you the best coverage possible. Don’t wait until the last minute when you’ll be forced to accept whatever can be quickly obtained.
If your business is home-based, don’t assume your homeowners’ or renters’ policy will cover you–there may be a limit on or exclusion for business-related incidences. The least costly solution for proper coverage: Add a rider to an existing policy where possible. If not, you’ll need to purchase a separate in-home business policy.
Car
Decide who should own your vehicle–you or your company by running the numbers. For example, if the company has three principals, there may be a fleet discount on insurance for company-owned cars.
To keep premiums down, gamble a little by raising your deductible. For example, doubling the policy’s deductible (say, from $500 to $1,000) can cut insurance rates by 15%.
Ask your agent or the insurance company for a listing of discounts available (e.g., discounts for "good drivers," low mileage, ABS breaks and anti-theft devices). Check employees’ driving records before allowing them to use company vehicles to avoid any future increases.
Idea: Make sure there’s coverage if you’re in an accident with your personal car when you’re on business–the policy may exclude business-related liability. For coverage, the business name may have to be included on a personal policy in order to be covered.
Health
Think outside the box to slash your medical costs. Create accounts that employees can use to pay medical costs not covered by insurance (withdrawals from these special accounts for this purpose are tax free). Your options:
* Health savings accounts (HSAs) can be used to cut a company’s medical costs by up to 40%. The company arranges for a high-deductible health plan, which costs substantially less than traditional health coverage. Then contributions to IRA-like accounts are made by the company and/or employees (up to limits fixed annually by law); the party making the contributions claims a tax deduction for them. These accounts belong absolutely to employees, who can take them when they leave the job.
* Health reimbursement arrangements (HRAs) . The company also switches medical insurance to coverage for major incidents only, saving considerably on premium costs. It then contributes a fixed dollar amount (set by the company) to a special account for each employee, which costs the company less than it would have paid in premiums on more traditional (comprehensive) medical coverage.
* Flexible spending accounts (FSAs) . These accounts, which can pay medical costs not covered by insurance, are funded with employees’ pre-tax dollars. If money is not used up by the end of the year (or within a 2-1/2 month grace period), the funds in the account are forfeited to the company.
For more information, see IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, at www.irs.gov .
Idea: If you’re self-employed, look for lower cost coverage through trade or professional groups, or your local chamber of commerce.
Workers compensation
If your company has employees, it usually must carry this coverage to protect workers in case of on-the-job injury. The premiums are tied in part to the number of accidents or occurrences, so safety measures can cut costs.
* Keep office space in good physical condition (e.g., no cuts in carpeting that can lead to trips and falls).
* Make sure workers operating any machinery do so safely. Provide proper training and any necessary safety equipment.
Find out more about safety requirements from the U.S. Department of Labor’s Occupational Safety & Health Administration (OSHA) at www.osha.gov ("click on small business").
Big Ideas for Small Business is a free monthly online newsletter from Barbara Weltman, author of The Complete Idiot’s Guide to Starting a Home-Based Business, Third Edition, and The Complete Idiot’s Guide to Starting an eBay Business. www.barbaraweltman.com
Tags: Accounting, Barbara Weltman, BarbaraWeltman.com, bills, cutting costs, Finance and Accounting, insurance, saving money
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Top 3 Tips For Trimming Your Shipping Costs
Friday, December 28th, 2007
If you are running a business selling products online, you are aware that shipping costs can make a large dent in your bottom line.
In this article, we will look at some ways in which you can trim your shipping costs and make your business a lot more profitable.
* Save A Penny, Save A Pound. Remember that shipping is not all about the carrier, the postage, or even the weight. If you are selling a lot of items, then odds are you are spending a lot of money each year on smaller, unnoticed items such as packaging materials.
Look for ways in which you can reduce the costs of these materials, including tape, Styrofoam, and labels. Buying wholesale or bulk is a great start; and of course, you can always go directly to the source through a shipping materials website.
* Use The Right Box Sizes! If you sell a large variety of products in terms of size, then make sure that you understand that size does matter in terms of shipping costs. There are a wide range of box and envelope sizes out there, and the U.S. postal service provides many of them for free.
Using the right size box or envelope will mean less cost for individual items shipped. It will also mean using a lot less of the smaller materials that add up, discussed in point number one!
* Shop Around For A Carrier. Of course, the biggest expense you will incur when it comes to shipping will be in the carrier services you use. You should undergo an analysis of your carrier’s costs every month and compare them to what the competition is offering.
There are plenty of options when it comes to delivering your packages, from shared loads to bus lines and of course the good old postal service. The most cost efficient means will depend on how many packages you want to send, and how much they will weigh.
Remember that it might work out much cheaper, per package, to send a bunch out at once, even though the total price itself may seem shockingly high. Take the time to do the math!
Shipping costs are a critical concern for any business that sells products to a diverse marketplace. Make sure that you invest the time needed in order to ensure you are keeping this costly part of your business as inexpensive as possible.
Tags: budget, cutting costs, Leeia Ladipoh, money, saving money, shipping, shipping costs, tips
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Cutting the Dead Weight: 5 Expenses to Cut When Your Business Needs Cash
Monday, November 19th, 2007
f you own a small business, you know that all those expenses can slowly creep up on you - until suddenly you feel in over your head. Don’t worry, you’re not alone - plenty of business owners have been in the same situation and have stayed afloat by cutting some of their expenses.
For a small business, there probably isn’t going to be a single big expense that will miraculously result in a windfall of cash. Rather, it’s all those small expenses that add up each month. Every business is different, with various expenses that should be looked at carefully and analyzed to see if they could be cut or reduced. Here’s a list of some of the more common expenses that many small businesses should take a second look at in times of low cash flow:
Reducing these 5 expenses could result
in a hidden cash flow for your business!
Credit card options - Having a merchant account to accept credit cards is expensive, and if your online business isn’t doing tens of thousands of dollars in sales each month, then perhaps you don’t need one. That doesn’t mean that you won’t accept credit cards, because companies like Paypal, Clickbank or 2Checkout offer credit card services without a steep monthly fee. Those companies get paid by receiving a small percentage of each credit card transaction. If you look at your options, you may easily be able to save several hundred dollars each year!
Phone service - Have you compared your long distance phone service to other companies on the market lately? There is a ton of competition, and long distance service is cheaper than ever. You can even get super-cheap rates from popular internet and VOIP phone line companies like Vonage and Skype. Go online and compare rates - chances are you are paying a lot more money each month then you need to.
Phone numbers - This is a time to get realistic. Do you really need that 1-800 number? Are all those cell phones necessary? How many business lines do you have? Do you need them all? All those numbers add up quickly, so take a hard look at each and see what can be cut loose.
Internet options - Just like phone service, there’s a wealth of internet options as well: cable, DSL, fiber optics, T1, T3. Compare your rate to the rates offered by your local cable and phone companies and then do an online search as well.
Storage Fees - If your products are being stored by a fulfillment house, you may be unaware at how fast all the costs add up. There’s shipping fees, handling fees, per item fees, incoming fees, outgoing fees, etc. Check their rates against other fulfillment houses. It may be cheaper to send your next shipment of goods to another warehouse with lower fees. Finding a cheaper fulfillment house can easily save you several thousand dollars per year if you stock a large number of items.
So, while these expenses may not be equivalent to a HUGE savings, they can still add up to quite a bit. And, for a small business, keeping monthly expenses low is key to staying afloat. Plus, once you see what a big difference comparing costs makes, you’ll be sure to check around first before committing to new expenses.
Tags: Accounting, Carrie Hinkel, cash flow, cuttiing expenses, cutting costs, Finance and Accounting, money
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Going Green to Make More Green
Tuesday, October 16th, 2007
A lot of attention is being paid today to the amount of energy individual businesses expend. The worldwide focus on global warming means that everyone is more aware of their ecological footprints than ever before. This focus extends to individuals and even to government, and the ramifications of going green can be felt at all levels of business, including small ones.
In fact, going green may help you to increase your bottom line in several different ways. First of all, basic “green” steps will also cut down on overhead expenditures in many ways. New government measures and incentives may also mean that your business benefits from using less energy and other natural resources.
Finally, customers may be more willing to purchase or use the services of a company who can proudly and truthfully claim that they have taken steps to reduce their carbon footprint.
Here are some ways in which you can go green - and make more green in the deal!
1) Watch your energy costs. This is probably the most important cost and carbon reducing measure that your business can take. Heating and cooling your place of business is guaranteed to carve a good sum of money out of the profits, and there are several things that you can do to cut these utilities down.
First, make sure that all windows and doorways are sealed; air leaks can cause a lot of lost cool air in the summer and a great way to let cold air in the winter. One good way to decrease your heating bill is to locate operations in a place with a lot of windows, which will increase the heat rays from the sun; but this can be a big disadvantage when the warm months come rolling around
2) Pay attention to your lights. Lights should never be left on in a room where no one is. If you have a larger office, you can try using motion sensitive lights in the washrooms, which flick on when someone is in the room. Make sure you and your employees always turn off lights whenever you leave a room. You should also make sure to replace all those inefficient incandescent light bulbs with fluorescent ones.
3) Reuse. There are a lot of different ways you can avoid sending old materials to the dump, and to use recycled materials as well to save trees from being cut down. Buy photocopy paper that has already been recycled, and reuse paper where you can (if you printed or copied something by mistake, for instance, don’t throw it away - use it for scratch paper). Also, don’t throw out old ink and toner cartridges - instead, have them refilled as much as is possible.
You should also attempt as much as possible to go paperless and store your records electronically (with backups of course!) and use email as your chief form of communication.
4) Drive less. Most of us need to drive for our small businesses, and you can cut down on your carbon emissions by timing your meetings so that you have fewer “driving hours”.
As you can probably tell, almost all of these green steps are easy to take and will result directly in lowered costs for your business. That’s one of the great things about the green movement; whether or not you believe the global warming predictions, the steps taken to reduce emissions will certainly save your small business a lot of money at the end of the year.
Tags: Accounting, advice, cost cutting, cutting costs, Finance, Finance and Accounting, going green, Leeia Ladipoh, saving money
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