In today’s business climate, there is always an impetus for small business owners to cut costs. When revenue is down, there is no other solution, right?
In fact, there is a better solution that simply cutting important expenses. Rather than reducing your overall spending, it’s better to form an overall strategy in order to get the most out of the resources available to you.
Pay Early – The invoices from your vendors may have a way to start saving you money immediately. Ever wonder what that “2/10 net 30” meant? That little term gives you the opportunity to save 2 percent on the total bill if paid within 10 days. It’s not likely that you’ll earn 2 percent of the bill amount in interest by keeping it in the bank for the next 30 days. So pay early and take advantage of vendor discounts.
Negotiate with Vendors – If you have a long-running relationship with a vendor, don’t be afraid to ask for reduced charges. Oftentimes, a customer’s loyalty will be paid back in the form of reduced charges or discounts. Talk to your insurance agent, your phone company, internet provider, and even your business credit card bank to ask for reduced rates.
Utilize a Co-Op – You can save money by buying in bulk. One way to do that is to work through a cooperative group or association within your industry. Using the power of a co-op, you can join forces to buy larger quantities and save a lot of money collectively.
Barter – Can you barter your services or products for some of your important expenses? Consider offering your bookkeeping service for an ad placement in an important local program. Perhaps you could offer the local computer fixit guy a bundle of your fresh fruit in exchange for upgrading your older desktop. Get creative and see how bartering can work for you.
Metrics and Marketing – Advertising is an important expense. Reducing your marketing also reduces the chance that you’ll get more customers. Exactly the opposite of what you want to do in a down economy. Instead, be sure that you spend wisely and check the effectiveness of any single marketing move. Online marketing, such as pay per click and Adwords, makes it easy to verify whether an ad campaign works. Also check with your local radio, TV, and newspaper salespeople to find out how to check metrics on their advertising platforms.
By being creative, you can still keep all of your important expenses – while saving on your bottom line.