It takes some serious belt-tightening to strengthen your business if your sales are down, your customers have disappeared and you are dipping into personal savings to meet the payroll. Here are some practical, easy-to-implement, cost-cutting strategies to consider as we leave summer 2001.
- Rent unused space and office equipment to another business owner who needs it. You should be able to charge $20 to $35 an hour to rent a desk, computer, printer, phone and support services to a needy entrepreneur. Advertise in your local paper. (We rent our conference room after hours to a therapist who meets with clients in our offices.)
- Lock the office-supply cabinet. Put a moratorium on buying all but essential supplies. Ask employees to dig through their desks, briefcases and pencil jars to use what they have on hand. Make use of all those free note pads and pens you've collected from trade shows.
-Consider refinishing office furniture rather than buying new. Companies like The Refinishing Touch (www.therefinishingtouch.com) send a crew to your office to do the work on-site with water-based, non-toxic materials. "We do a low-tech business with very high-tech techniques," said Mario Insenga, president and founder of the Alpharetta, Ga.-based company, which has refinished about a million rooms of furniture since its founding in 1977. The company works for corporate clients, major hotel chains, universities and the federal government.
- Review cell phone and pager use. Take away phones and pagers from employees who rarely leave the office or travel on company business.
- Review and update your business insurance coverage. If you have sold a truck, car or other insured equipment, call your broker to remove it from your policy. Make sure you take advantage of good-driver, non-smoking and any other special discounts you may qualify for.
- Join a warehouse store to shop in bulk. Take advantage of all the membership benefits in addition to discount prices. Costco's executive business membership at $100 a year is an excellent value. Not only can you visit the store an hour earlier than regular members, but you can apply for a low-interest business credit line and affordable credit-card processing services. While you are there, buy healthy snacks for your employees. Free snacks are a cost-effective morale booster. Skip the candy bars, and buy baby carrots and grapes in bulk.
- Limit business travel. Don't fly across the country to meet with just one person. Set up several meetings with current and prospective clients to justify the cost. Try video-conferencing instead of meeting face to face. (Kinko's offers this service, billed by the hour, at many of its stores.)
- Print on both sides of the paper for internal documents.
- Use U.S. Postal Service Express and Priority Mail service rather than private, overnight delivery services. The Postal Service will pick up packages, just like the other guys. Presort and bar code your mail to qualify for substantial discounts on postage. The Postal Service also has a suite of products and services aimed at small business owners. Visit www.usps.com.
- Turn off lights, computers and air conditioners when you leave the office. Conserving energy saves money and resources. Change your light bulbs to energy-efficient models.
- Solicit bids from new vendors and suppliers for the materials you use to make or package your products. Compare prices and renegotiate prices with your current vendors if you are offered a better deal.
- Take advantage of early-bird discounts. Order holiday cards in September to receive free shipping from UNICEF. Other card and gift companies have similar discounts for ordering early. Send Thanksgiving cards this year to stand out from the crowd, and beat the Christmas rush.
- Forget expensive holiday gifts. Make small charitable donations in honor of your best clients, or send them gift certificates for movie tickets, tickets to a local playhouse or family restaurant. Host a holiday open house instead of sending expensive gifts.
- Buy ad space after the official closing deadline. Small newspapers and radio stations will often sell you unsold space and time at a substantial discount. Have your printed ad or commercial ready to be delivered and produced to fit the format.
- Save money on trips by staying with friends or relatives. Take your hosts out to a lovely dinner with wine, which should cost far less than a hotel room in a major city.
- Take advantage of special online-only discounts offered by airlines.Internet Use
The National Federation of Independent Business and Wells Fargo Bank recently polled 750 small-business owners to find out how the economy was affecting their companies and how they were using the Internet.
Seventy-one percent said finding qualified employees was "hard," compared to 29 percent who said it was not. In a tight labor market, the survey found small-business owners tend to leave positions open. The owner works longer hours 83 percent of the time, according to the survey. About half the time, the business cuts productivity.
The survey also looked into Web use. Fifty-seven percent of those polled said the Internet was a key part of their business. Sixty-one percent of those who use the Web have a business Web site. The sites did not generate income directly, but encouraged customers to make transactions by phone, fax or in person.
Jane Applegate is the author of "201 Great Ideas for Your Small Business," and is CEO of SBTV.com, a multimedia site providing small-business resources. She can be contacted via e-mail at firstname.lastname@example.org, or by mail at P.O. Box 768, Pelham, NY 10803.
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