8 Cost-Cutting Tips
 By R.K. Sparkman

A gaping hole isn’t the only thing that sinks the ship. Slow leaks do too.

The gaping holes in your budget made by huge expenses are easy to spot. But tiny leaks – the overlooked lesser expenses – are stealthier. A few bucks here, a couple of dollars there, and soon you’ve accumulated a big bucks drain.

You’re probably already aware of gaping holes in your budget. It’s time to plug the little leaks.

1. Advertise wisely
Evaluate the return on investment of your advertising dollars. You know how much you spend on advertising. Determine how much business that advertising brings you. To find out, ask. Whenever engaging a new customer or even a return customer ask, “What brought you to us?” If no one tells you it was your ad in the Yellow Pages, why are you spending hundreds of dollars for Yellow Page ads?

2. Stock up
To be frugal, we sometimes buy office supplies only when we run out, and then merely replenish short-term inventory. The problem is we are subject to whatever the price may be, and pay a higher price than necessary for small quantities.

Office superstores advertise “specials” on nearly everything they sell. Compound your savings by stocking up on supplies in large quantities when they’re on sale. Rather than buying laser paper two or three reams at a time, buy it when the “buy one, get one free” sales occur. And buy multiple cartons, not just reams.

3. Rely on rebates
These are gimmicks to lure you into the store to buy other stuff. With a little discipline, you can restrict purchases to only items on your “need to get” list.

Many things, like CD-ROMs, periodically are offered with outrageous rebates such as getting the entire price of the item back, making the purchase price effectively zero. If you need CDs, why would you pay a dime more than zero?

4. Refurbish or refill
Several Internet vendors provide refurbished or refilled laser printer cartridges for a fraction of what you would pay for a new, replacement cartridge. Some even offer do-it-yourself kits with toner and instructions for refilling your empty cartridge, which is even cheaper. Most major brand printers are supported. You can cut costs 50 percent or more.

5. Bulk up
The downside to wholesale stores like Costco is that in order to take advantage of their lowest prices, purchases must be in quantities more than you need. Work around this problem by joining with other small-business operators and pooling your cash to take advantage of bulk discounts. Then divvy up the goods. In this way you can purchase only the amount you need, but priced at volume discounts.

6. Avoid upgrade envy
Software manufacturers continually upgrade their products. Don’t be a slave to the latest technology. Typically, upgrades list their improvements over previous releases. If the improvements don’t add anything you absolutely need, why spend another $100 to $500?

7. Avoid interest
Don’t carry credit card balances. If you’re stuck with a large balance, take advantage of periodic offers from other credit card companies that allow you to transfer a balance at a low rate of interest.

8. Shop and compare
For example, find the least costly overnight delivery system. AFS members can save up to 26 percent by using DHL Express Delivery Services. Long distance phone service at 3.9 cents per minute is also available for AFS members through PowerNet Global, 24/7. New customers even receive 60 free minutes of long distance service.

(Posted August 2005)

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