Whether the economic climate is forcing you to tighten your belt or you just want to trim your business expenses, you might find it's not as difficult as you thought.
Business consultants and professional cost-cutters know where to shave off a few dollars, and often, it's someplace you might not initially think of looking. They give our readers advice on how to cut expenses to improve their bottom line.
Phone and computers
One technology that businesses can adopt to save money is voice over IP (VoIP ), which allows people to run their phones over the Internet. By using VoIP, businesses can cut their phone bills.
“[VoIP has] saved businesses tens of thousands of dollars,” said David Jameson, a small-business consultant who is executive vice president of the Chicago-based Kendall-Kline & Associates.
Businesses should also look into Google apps for businesses, such as those for email and document storage, said Dan Schneider, founder of SIB Development & Consulting, a Charleston, S.C.-based company that advises businesses about reducing expenses.
[Read a profile on SIB's Dan Schneider and his amazing career as an entrepreneur ]
It is less expensive for businesses to use these programs than it is for businesses to buy a lot of software, Schneider said, and businesses do not have to pay for software licenses for all their employees.
In addition to cutting back on software purchases, small businesses may also want to get new hardware by switching from PCs to Macs, Schneider said. While Macs are more of an investment upfront because they tend to be more expensive, he noted, they tend to get less viruses, so they do not have to be replaced as frequently.
Traditional forms of advertising may not be crucial for small businesses anymore.
“It used to be that Yellow Pages were critical to getting yourself known,” said Craig Jennings, a small business consultant based in Long Island. However, Jennings added, this is probably no longer the case, and now the key is for small businesses to be displayed prominently in search-engine results.
Along those lines, Jennings added that it is probably more necessary for small businesses to have websites than it is for them to place an ad in the phone book.
Small businesses can often get better rates for utilities — such as gas and electric — than those they are currently paying. While business owners frequently pay the rates that the dominant suppliers tell them to pay, suppliers often have lower rates available, said Michigan-based cost-containment expert Fred Manuel, who works for Alliance Cost Containment.
Organizations have to do research to learn about these lower rates, and may need to hire experts to conduct this research for them, Manuel said. While hiring a consultant may seem like an expense, Manuel said companies will only have to hire and pay such an expert once. He added that businesses should only pay consultants on a contingency basis in which the consultant gets a percentage of the amount saved.
In order for small business owners to develop the best relationship they can with utilities suppliers, they should also formalize the purchasing process with suppliers through the use of written requests for prices, Manuel said.
“[Written proposals are] very specific and very professional so it sends the right message,” Manuel said.
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