50 Ways to Save Money in Your Business
Monday, September 19, 2011
Posted by: Rhette Baughman
Save your company thousands of dollars
with these penny-pinching tips.
On a shoestring budget (and what
entrepreneur isn't?), it really pays to scrimp and save. Just in case you've
forgotten the value of a hard-earned penny, we've come up with a slew of money-saving
ideas to boost your business's bottom line-from cutting your legal bills to
inexpensive ways to draw in customers. Though some tips will save you more
money than others, the end result of your overall spendthrift strategy could
add up to a bundle.
1. Piggyback your advertising. Including advertising material in other mailings, such as
in invoices, saves postage and other costs, says J. Donald Weinrauch, co-author
of The Frugal Marketer. Likewise, make the most of your point-of-purchase
opportunities by tucking coupons, newsletters or other promotional fliers in
the bag with customers' purchases.
2. Be a good neighbor.
Split advertising and promotion costs with neighboring businesses. Jointly
promote a sidewalk sale, or take your marketing alliance
further by sharing mailing lists, distribution channels and suppliers with
businesses that sell complementary goods or services.
3. Ask the people you know for help. The kind of support you'd most like to get from your
contacts is referrals-the names of specific individuals who need your products
and services. So go ahead and ask! Your contacts can also give prospects your
name and number. As the number of referrals you receive increases, so does your
potential for increasing the percentage of your business generated through
4. Got a happy customer?
By telling others what they've gained from using your products or services in
presentations or informal conversations, your sources can encourage others to
use your products or services.
5. Make a special TV appearance. Local cable TV stations often have very reasonable
advertising rates at time slots throughout the day and night. Though you won't
necessarily reach prime-time viewers, you will make an impression where it
counts-in the comfort of potential customers' homes.
6. Offer expert advice.
Teaching a class, speaking at a community meeting, or writing an article for a
local paper not only makes you look like an expert but garners low-cost
attention for your business.
Read more online here.
7. Start your search engines. Research your market and find potential visitors for your
Web site by looking through Usenet newsgroups (forums on the Internet where
people post messages for public viewing) and special-interest groups related to
your target market, product or service. Or, if you have America Online, visit
their Small Business Center, which includes libraries of small-business
information you can download at no charge.
8. Cut costs when setting up your online store. Think going online has to cost an arm and a leg? You can
start out by selling items for next to nothing on online auction sites like eBay and
Auctions . If you want to create a professional storefront, there
are several "Web site in a box" solutions available, usually for a
low monthly fee.
Read more online here.
9. Start chatting. Find
newsgroups that cater to your audience, and join the fray. "I didn't start
[participating in online discussion groups] to generate business, but as a way
to find information for myself on various subjects," says Shel Horowitz,
owner of Northampton, Massachusetts-based Accurate Writing & More and
author of several marketing books, including Grassroots Marketing. "But it
turned out to be the single best marketing tool I use. It costs only my time.
[One] list alone has gotten me around 60 clients in the past five years."
Always include your URL in your signature, but don't do any hard selling-most
groups will ban you immediately. Instead, provide useful information that'll
make people will want to click on your site.
10. Spread the word yourself. Are you letting people know what your URL is? Try putting
it on your letterhead and business cards and in e-mail signatures-wherever
potential visitors are likely to see it. Include it on employee uniforms, any
promotional items you give away, all press releases, in your Yellow Pages ad
and on company vehicles.
11. Get a suite deal. You
don't have to run your office full-time from an executive suite to benefit from
its services. Many homebased entrepreneurs find executive suites meet a range
of needs, including access to a private mailbox and a receptionist to answer or
forward calls to your home office. Visit the Office Business Center Association
International Web site for more information.
12. Be mobile. While
the costs of establishing a permanent retail location can be steep-you may
spend up to $100,000 or more, with leases spanning three to 10 years-carts,
kiosks and temporary spaces can be an easier way to get a foot in the door with
a lot less risk. The upfront investment for a kiosk or a cart ranges from just
$2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail
Report. License agreements for carts and kiosks are shorter and are usually
renewed every month up to one year depending on the location. This arrangement
makes it easy for entrepreneurs to "come in, try it out for a month, and
if their product isn't working, shift to a new product line or close up shop and
move to a new location," Norins says.
13. Buy recycled printer cartridges. Check Google or your Yellow Pages for a local recycled
printer cartridge supplier. Or if you want to mix your charitable instincts
with your printing needs, visit www.lasermonks.com , a remanufactured
printing supply company run by a group of monks in Wisconsin who, after
business expenses are paid, donate their profits.
14. Fill it out for free.
Instead of buying forms at your local office supply store or spending time
creating them yourself, you can find tons of free forms online that you can
download, customize and print. Our free forms on Formnet can get you started.
15. Get free software. Visit
to try hundreds of software products for free through trial downloads, freeware
and limited versions of the full product. Another tip: If you haven't found
what you're looking for through Download.com or our software guide, check out
the manufacturer's site. Most offer free trial downloads.
16. Buy used equipment.
Save up to 60 percent by buying used computer equipment,
copiers and office furniture from stores such as the nationwide Aaron Rents
& Sells chain. Auctions and newspaper classifieds are other good sources of
17. Save by association.
When looking for insurance, check with your trade association. Many
associations offer competitive group insurance.
18. Be prepared.
Buying appropriate insurance upfront saves money in the long run, says Jeanne
Salvatore of the Insurance Information Institute , a nonprofit organization in
New York City. Consider what situations would be catastrophic to your business
and protect yourself with adequate insurance. "Disaster recovery,"
says Salvatore, "is one area where business owners shouldn't scrimp."
19. Make a foul-weather friend. By arranging for an alternative place to run your business
in case of a major disaster, you may be able to save on business interruption
insurance, advises the Insurance Information Institute. For instance, you could
arrange with a firm in the same industry to use their facilities in case of
damage, and vice versa.
20. Check up on your medical insurance. Before choosing a medical insurance carrier, ask for
information on past claims and the loss ratio of paid claims to premiums,
advises the Council of Better Business Bureaus in Arlington, Virginia.
21. Raise your deductible.
Raising the deductible on your insurance usually lowers your premiums. Even if you
end up having to pay the deductible, it's likely to be less than the amount you
22. Aim to lease.
Employee leasing-in which you turn over your work force to a professional
employer organization that leases your employees back to you-can save you
substantial cash on employee benefits, says Bruce Steinberg at the American
Staffing Association (ASA). For referral to a leasing company near you, visit
the ASA online at www.staffingtoday.net .
23. Go with the flow. Rather
than paying for employees who sit idle when business is slow, consider hiring
temporary employees to handle surges in business.
24. Make experience count.
Get free or low-cost help-and give local college students a chance to learn the
ropes-by hiring interns.
25. Use independent contractors. Employers generally don't have to withhold or pay any
taxes on payments to independent contractors. But be very careful that your
independent contractors fit the definition provided by the IRS or you could
26. Commission your sales force. Overhead, salaries, incentives, training costs, fringe
benefits and expenses add up when you're hiring your own sales representatives.
Contracting independent manufacturers' sales reps, paid on commission only, is
less expensive-and often equally effective.
27. Clean up your mailing list. The U.S. Postal Service will clean up your mailing list
for free, correcting addresses, noting incomplete addresses and adding ZIP+4
numbers so you'll be eligible for bar-code discounts.
28. Prune that mailing list even more. The Direct Marketing Association offers this checklist of
cost-cutting ideas. Eliminate nonresponders and marginal prospects; print
"Address Correction Requested" on the face of your mail; investigate
co-mingling your mail with that of other small mailers to take advantage of
discounts available mainly to large mailers; and stockpile mail to build up larger
29. Be an early bird. Send
mail early in the day, and you can usually expect to get one- to two-day
delivery for the price of a first-class stamp.
30. Shop around for an overnight courier. Overnight delivery rates for the major couriers are competitive;
however, if you're willing to wait a few hours-or even an extra day-you could
31. Mind some petty pointers. Don't get careless about your petty cash account.
"Though you don't need receipts for expenses under $75, you should still
track these expenses since they can add up," advises Holmes Crouch, author
of 18 tax books.
32. Hire your children.
If your children are at least 14 years old and pay their own taxes, it pays to
take advantage of their lower tax bracket. "You can essentially transfer
income from your business to them [to save money]," says David L. Scott,
author of The Guide to Saving Money (The Globe Pequot Press).
33. Take a stand on taxes.
If your business is new in the neighborhood, you may be at a higher tax rate
than those who have been there longer. "Go to city hall to determine what
your neighbors are paying, and use this to negotiate a better rate," says
Pete Collins of New York City-based PricewaterhouseCoopers LLP. "Expanding
businesses can often negotiate with community authorities, who want them to
stay in town rather than move and take jobs elsewhere."
34. Homebased? Don't
overlook crucial tax deductions. In addition to being able to deduct a portion
of your rent or mortgage interest and utilities as a business expense, you can
also deduct a percentage of various home maintenance expenses, along with a
portion of the cost of services such as house cleaning and lawn care. Check out
the IRS's Web site
, or check with a knowledgeable tax advisor for more information.
35. Get out on the town.
If much of your business is conducted at restaurants or you find yourself
driving to clients' offices, make sure you take those deductions. If you
entertain clients or potential clients to discuss a current or future project,
you can deduct a portion of your entertainment costs. To qualify for this
deduction, you must maintain a log of entertainment-related expenses you plan
to deduct. For mileage, you can deduct 37.5 cents per mile in 2004. This figure
usually changes annually, so check with your accountant at the beginning of
36. Make credit comparisons. If you tend to run unpaid balances on your credit cards at
the end of the month, shop for a card with a low interest rate. If you pay in
full, it's more important to avoid an annual fee and look for a longer grace
period. "Often credit card issuers waive the annual fee or reduce the
interest rate if you ask," says Scott. "Just tell your credit card company
you've had several solicitations from other companies with more favorable
interest rates or no annual fees, and ask if they will reduce yours."
37. Avoid cash advances.
"Credit card companies usually charge an upfront fee of up to 2 percent of
the advance, with interest accruing immediately," says Scott.
38. Bank on an early deposit. Make bank deposits early enough in the day so you get
credit (and start earning interest) that day.
39. Get checks in the mail.
Ordering your checks from a printing company often costs less than getting them
from a bank. Options include Checks in the Mail and Designer
40. Form a buying alliance.
Join with another business or a trade association for bulk purchasing
41. Take it with you. If
you're near your suppliers, pick up your order yourself-or perhaps have a
friend or family member do it for you, suggests Sarah Williams Steinman, president
of Casco Bay Herb Co., an herbal soap manufacturer in Cumberland, Maine. For
example, Steinman's husband travels throughout the Northeast. "He keeps me
updated as to when he might be near one of my suppliers," she says.
"He often travels through the town where my olive oil supplier is, and
he'll pick up a few hundred pounds of oil on his way home. That saves me about
$75 in shipping." Caution: Pick up supplies yourself only when it truly
saves you money. If it's taking you away from a revenue-producing activity,
you're not really saving.
42. Be reluctant to give credit. If you do extend credit, thoroughly check the client's
credit background, says Collins. For less-than-creditworthy accounts, Collins
advises considering the following actions: Collect cash in advance; send
partial shipments; request letters of credit, personal guarantees and a pledge
of assets; take out credit insurance; or think about factoring (see below).
43. Query your consultants.
The professionals you work with regularly are often easy to bargain with,
thanks to the rapport you've developed with them. Ask your insurance agent,
accountant or attorney how you can cut back on their costs. You'd be surprised
at the suggestions they might offer on ways to cut your premiums, reduce
billable hours or avoid huge retainers. You might also barter your services.
44. Be a legal eagle. When
hiring an attorney, make sure you have a written fee agreement to prevent
surprises. It should include an estimate of the time to be spent on your case
and specify what's covered in the fee-including typing or copying-and what is
45. Learn something new.
Rather than pay a consultant to write your press releases, for example, hire
one for an hour or so to show you how to do it yourself.
46. Run from the law.
"Avoiding lawsuits is a big factor in business success," says tax
book author Crouch. "Even arbitration can get expensive." The best
alternative: Try to work out any problems before they grow to the point that
attorneys get involved. "Don't ignore any written or phone
47. Stretch your budget with barter. Swapping one product or service for another is a good way
to avoid cash outlays-and unload slow-moving inventory. If you'd rather not
bargain with other businesses directly, hire a commissioned barter broker
(listed in the Yellow Pages under "Barter"), or join a commercial
barter club or exchange. The National Association of Trade Exchanges (NATE) is
a clearinghouse for member exchanges across the country, allowing business
owners to swap just about anything with anyone. Participants typically receive
"trade dollars" for their goods or services, which are brokered
across cities nationwide with the help of NATE. Visit NATE at www.nate.org
48. Time your payments.
Ask suppliers if they give discounts for early payment. If not, it's to your
advantage to pay your bills-including utilities, taxes and suppliers-as late as
possible without incurring a fee, advises Scott. "The longer funds are
under your control," he says, "the longer they're earning a return
for you rather than someone else."
49. Join an association.
Many trade and business associations have reasonable membership fees and offer
discounts on everything from insurance, travel and car rental to long-distance
phone service, prescriptions and even golf course fees.
50. Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote
a competitor's lower price, a supplier or vendor will often match that price to
win your business.
Contributors include Jacquelyn Lynn,
Ivan R. Misner, Chris Penttila, Guen Sublette and Laura Tiffany