Paul Kelley is an online business owner and writes about money management, careers, and technology.
The current economic climate for small businesses is not ideal. Taxes recently went up and regulations have tightened. Less venture capital in the development stage, and less consumer money to be spent when your product hits market have increased competition in an already tight economy.
With that in mind, saving money at your small business is more important now than ever. To do so, you have to get a little creative, do some research, and roll up your sleeves – but the savings are out there. Start with these five steps to help free up some much-needed capital and start getting that edge over the competition.
1. Barter Your Services
A great way to cut costs is to offer your small business’s skills in exchange for services from another company or individual. Start by asking around your community, advertising your services on social media networks, and even websites like Craigslist.
To get great bang for your buck with this idea, try a website like U-Exchange in which you post the specific talents you have to offer as well as the specific needs of your business. U-Exchange is available in 82 different countries, giving you a large pool of talent to draw from right at your fingertips.
2. Review Vendor Contracts
It’s probably been a while since you did a thorough cost-benefit analysis of your vendor contracts. Dig them all up and run the numbers to see if you can save money on telephone and Internet service, cleaning costs, real estate expenses, or even materials and cost of goods sold.
Everything is negotiable, even contracts that are already in place. Offer an extended term to your current vendors at a lower rate. Investigate their competition and use any lower prices you find to bargain a new contract for yourself. Offer to refer other businesses to your current vendors in exchange for a rebate. There are plenty of options out there, you just have to take the lead and seize them.
3. Improve Customer Service
It may not be obvious, but you can significantly reduce costs by improving your customer service. If your staff is well-trained, the chance of product returns or dissatisfied customers is going to decrease. If you live and breathe customer service, you’re likely to generate a solid consumer base which is going to help you build revenues. Even if you can’t significantly cut expenses by improving your customer service, you can certainly generate more sales – which is better in the long-run.
4. Partner Up on Marketing
If you have your eye on a particular billboard or bus stop advertising space in your area, you may shy away because of the excessive cost. Consider reaching out to other local business owners in a similar industry as yours to see if you can split the expense and both advertise on that platform. If you own a computer repair business, try partnering up with a small electronics retailer and cut that advertising cost in half. As a small business owner you have to know when to compete and when to collaborate. Chances are, you’ve got more friends than you think out there.
5. Get Your Software for Free
There’s rarely a good reason to pay full price for software. Start with websites like FatWallet and Dealcatcher, which send you discount deals on products and services, including computer software. If you don’t have any luck there, consider CNET and Download.com. Both offer a variety of software titles that are completely free to download. If you have multiple users of a certain program, consider purchasing a single license for it and having your employees rotate in and out of that station as the need arises.
Once you start to realize your savings, invest that money where it can do the most good. Do you need to expand your organization? Invest more in marketing? Add staff members to your team? Answering these questions correctly can ensure that your hard work in cutting costs pays off in the end. And take this tough economy as a lesson learned – when the bull market returns, a frugal spending philosophy makes for a lean, thriving company.
What other ways can you think of to save on small business expenses?