Small Business Blog

Small businesses have been among the hardest hit by this economic recession, as indicated by recently published data from the Small Business Administration. How’s your small business holding up? Chances are, you could benefit from trimming the fat from your expense structure. Try these six strategies for cutting expenses and improving your small business’ bottom line.

Advertise more efficiently

Cancelling all of your ad contracts isn’t an option if you plan to stay in business. If you are wondering why, read Recession Market Strategies. What you can do is…

take steps to improve your advertising efficiency. Admittedly, this is a puzzle that’s not neatly solved with a few calculations. Review your current spending and shift money into the initiatives that create lasting impressions with the right audiences. Reassess your “guilt-induced” advertising, which might include listings in publications produced by local nonprofits or even your chamber. If those listings aren’t putting you in front of the right people, consider giving a straight donation instead of draining your ad budget. Find a balance between traditional advertising and grassroots campaigns.

Change your policies

The options here depend on what kind of business you have. Potential strategies include:

• Paper conservation policy: employees are not allowed to print out personal information on company ink and paper; emails should not be printed; documents for internal use should be printed on both sides of the paper
• Overtime policy: prohibit overtime without prior approval from a supervisor; start using temporary employees, when possible, to fill in gaps
• Document transmission/correspondence policy: advise your employees to use email and fax instead of snail mail

Team up with neighbors

Organize a buying group with neighboring businesses to take advantage of bulk discounts on supplies.

Reassess your subscription-based fees and dues

Review what you are paying for landlines, Internet, cell phone service, cable—basically everything that gets auto-billed to you periodically. These subscription services can be hidden stores of excess costs, simply because they are easy to ignore over time. Questions to ask include:

• Could you do with one less phone line? Evaluate the pricing on buying a switching box that routes faxes from one landline.
• Can you save by bundling the phone lines and Internet service?
• Is Vonage or a similar low-cost service an option for you?

Also evaluate the membership dues you are paying. If you don’t have the time and resources to work these memberships, you may be wasting money on those dues.

Farm out your space

If you have an office, consider leasing a corner to a successful freelancer. If you have a retail space, lease space to a local artist or designer who offers products that are complimentary to your own. Or, sell products on consignment. In a retail environment, this strategy takes a little extra analysis. For example, you need to evaluate whether you are giving up revenue dollars when you give up the space. If you have extra space due to inventory reductions, then the money earned on the lease or consignment deal should be gravy.

Refinance your debt and contracts

It never hurts to ask. Shop around first to get a feel for market interest rates and market lease rates. Apply for a loan from a competing bank or credit union, so you know how marketable your debt is. Then approach your bank and your landlord and ask about renegotiating your contracts.