The Ultimate Checklist For Cutting Small Business Costs
Small business owners don’t have the luxury of spending with reckless abandon. We must be lean mean fighting machines in order to thrive. If you haven’t done a thorough review of your company’s expenses recently, it’s time to cut some fat.
Here is a robust checklist for cutting small business costs.
1. Upgrade your credit card.
If your small business uses a credit card to purchase things like office supplies, gas and food, you could be throwing away a lot of money by not having a credit card that treats you right. Shop around for a card that offers:
- a lower interest rate
- a cash back rewards program
2. Go paperless and reduce storage and mailing costs.
After years of squirreling away every document that was mailed to us, we finally cleaned out all of our company’s storage bins saving us thousands of dollars a year. All this thanks to implementing a paperless policy in our agency a few years back. Now every piece of (non-junk) mail we get is scanned in as soon as it arrives and routed electronically to the appropriate person to handle.
3. Store your data in the cloud.
For some businesses, just going paperless might not solve their addiction to in-house severs for data storage. Dump those old clunkers and save the cost of repairing and maintaing them by signing up for DropBox or Google Apps for business, which includes Google Drive for creating and storing documents.
4. Use GoToMeeting or Skype to save on travel expenses.
- Car maintenance
- Airline tickets
- Food (both for you and your staff)
5. Switch to VoIP for calling.
Most VoIP phone providers offer unlimited calling within the US and international calling is usually available. Vonage Business offers features that have become standard among most phone systems including “follow me,” extension-to-extension dialing and conference calling. Allows for easy setup of home office for remote workers. Another way to reduce small business costs.
6. Use an independent insurance agent.
Shop your business insurance policies with an independent insurance agent. Find one that has access to plenty of A rated (or better) insurance carriers, as rated by A.M. Best. An independent insurance agency will be able to shop your insurance policies to find the best combination of price and coverage. Plus, they might be able to find gaps in your current coverage and recommend the most crucial insurance policies for your specific type of business. Because insurance is usually a higher ticket item, there’s more potential here than anywhere of cutting small business costs.
7. Use a broker for IT equipment
Use a broker for your next big technology equipment purchase. Yes, they exist. And just like using an independent insurance agent, an equipment broker can leverage their vendor relationships to find you the best equipment for the lowest price. Check out Episode 4 of our podcast to learn more about how an IT broker might be able to help you in cutting small business costs.
8. Hire a Virtual Assistant.
Hire a Virtual Assistant instead of an in-house assistant. A VA, as they’re also known, is capable of doing just about anything a traditional executive assistant can do. They just live somewhere physically different from you and your office. They can also be hired on a full time or contract basis for a fraction of the cost of a traditional assistant.
Want proof of concept? Check out Chris Ducker’s book Virtual Freedom: How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business Chris is the founder of one of the most successful VA placement firms in the world.
In his book, Chris walks you through an exercise to identify what you shouldn’t be doing as a business owner that could be better handled by a VA. He then shows you exactly how to hire and on-board your first virtual assistant to help take your company to the next level, all while cutting small business costs.
9. Consolidate office locations.
This may seem like a no-brainer. But most (successful) entrepreneurs I know are so focused on their daily goals, it’s easy for them to overlook cost reducing measures like this. Office consolidations have played a big part in cutting small business costs for our company agency over the years.
My agency has gone through growth spurts that have left us with multiple offices in close proximity to each other. When we merged these offices together, we not only eliminated thousands of dollars a month on rent, but also utilities and technology infrastructure as well.
Here’s a breakdown of the cost savings from our most recent office consolidation:
- Copier lease and service
10. Ditch your old fax lines.
Faxing is one of those annoying tools of office life that has managed to hang on long past the time it should have died. I rarely ever fax anything because of this new fangled thing called email. But when I need it, I need it. Instead of paying $100+ per month on a fax line, sign up for a significantly lower cost option like eFax. This allows you to fax documents through your email. Just attach the document you want to fax to a new email and add the fax recipient’s number to the beginning of a special email address given to you by eFax. Hit Send. And you’re done!
11. Save gas by never going to the post office again.
Use a combination of Stamps.com and your favorite shipping carrier to get stuff mailed. Stamps.com offers a free trial to print stamps right from your computer. While FedEx, UPS and the USPS will all pick up your packages to ship out for you right from your home.
12. Email your newsletters.
Embrace the 21st century and stop mailing client newsletters through snail mail. There’s this awesome tool everyone’s using now called EMAIL. It’s super cool. And when you partner with a an email marketing provider like MailChimp, you’ll not only save money on postage, you can also:
- Use it to collect additional email addresses for your list.
- Use auto responders to market products and services to your subscribers.
- Design beautiful newsletters without needing a degree in coding.
13. Negotiate your rent.
Unless your landlord hates you or has someone lined up at the end of your lease who’s willing to pay more than you, believe me, they don’t want to lose you as a tenant. I’ve cut small business costs this way several times. Don’t expect half off. But remind your landlord about your stellar payment history and the fact that you’re not a high maintenance tenant. You’ll be surprised how effective this is.
14. Barter with your vendors.
No, I’m not kidding. There are plenty of people out there who have set up agreements with one or more vendors to provide each other goods or services in lieu of charging each other for them. This concept isn’t new. It’s been around for centuries! Of course, you must have a product you can do this with legally. For instance, my insurance agency can’t just give our shredding company free insurance policies. The insurance carriers I represent won’t allow me to, and neither will our state’s insurance commissioner. But you may be far luckier than me in this regard. Get creative!
Bonus: Listen to Logan Hale’s podcast episode to learn how he set up some very successful bartering agreements with his vendors.
15. Audit your own expenses.
Conduct a thorough expense audit to uncover opportunities for cutting small business costs. If you haven’t done this in a while, or ever, now would be a good time.
Do this. Make a list of all the vendors you pay each month. Next to each one, write down 2 or 3 alternatives you could price shop. Then go on a hypothetical comparative shopping spree online or contact these potential replacement vendors to gather proposals. For instance, you could take the last office supply order you made and run those same items through a couple of other vendor sites and see what kind of savings you get. Just be careful not to sacrifice quality for a lower cost.
Cutting small business costs is imperative for your company to stay fit. This list serves as a reminder of the options you have available to you. For even more cost reduction tools, check out our Resources page. Many of the vendors listed there offer a trial discount if you use the link provided.
How are you cutting small business costs? Let me know in the comments below.