Save Money By Cutting Costs
 By B.J. Addington

During times of economic slowdown like we’re facing today, most small-business owners are looking for any opportunity to do more with less. One of the best ways is to reduce your business operating expenses and costs.

You must be careful, however, not slash and burn. Don’t cut costs randomly without any consideration of the potential impact on your business. Instead of thinking cost cutting, instead think in terms of expense management.

Here are 10 common areas where most companies can better manage and reduce costs without hurting their competitiveness:

1. Watch out for bank fees
Miscellaneous bank fees can add up fast. Most banks now offer free small-business checking with a low minimum balance, so switch to a free account if you’re paying a monthly fee.

You can link your checking account to an overdraft protection line of credit to protect yourself from accidental overdrafts and fees that can top $30 per occurrence.

Also avoid paying out-of-network ATM fees.

2. Manage your accounts payable strategically
First, always pay invoices on time to avoid late fees and interest charges. Second, many vendors offer discounts for paying early. If your cash flow will allow, pay early and reap the savings, which can be significant on large invoices.

3. Make tax payments on time
Similarly, make all tax payments in a timely manner to avoid penalties and interest charges.

4. Raise your insurance deductibles
You can shave your auto and property insurance premiums by 10 percent or more simply by raising deductibles. This is a form of self-insurance. In other words, you take on a little more risk in exchange for paying less in premiums.

5. Take a close look at your telephone, Internet and wireless plans
Competition is forcing rates down in many markets, so carefully re-examine your plans. You can usually save by bundling all three of these together.

6. Re-examine marketing costs
Many companies instinctively slash marketing when finances get tight, but this can be penny-wise and pound-foolish. Instead, take a close look the effectiveness your marketing programs. Reduce or eliminate spending on any marketing efforts that aren’t generating measurable results.

7. Pare back travel and entertainment expenses
Soaring energy have raised the costs of everything from plane tickets and gasoline to restaurant meals. For starters, eliminate travel whenever possible. Can you conduct a meeting via videoconference instead of in person? Scour the Web for deals on airfare and hotels. And if you must wine and dine clients or prospects, try to do so more cost-efficiently. Will a casual dining restaurant suffice instead of a five-star establishment?

8. Don’t send overnight packages
It’s easy to get into the habit of sending packages overnight, but before you do, consider whether it really needs to arrive tomorrow. Using a two- or three-day delivery option may be half as expensive as shipping overnight.

9. Renegotiate your rent
It’s a tenant’s market in many areas of the country today, so see if you can negotiate a better deal with your landlord. If your lease is up for renewal soon, arm yourself with data on comparable rental rates for office property in your area and try to negotiate from a position of strength.

10. Use your AFS benefits
As an AFS Member you can enjoy savings on products and services your small-business uses every day. Cut your expenses today by checking out some of these benefits:

• Save on design services, printing and mailing for your marketing materials. At AlphaGraphics AFS Members save 10 percent off retail list prices.
• Save up to 26 percent over other overnight carriers with a special DHL Express program.
• Save up to 80 percent off list price on office products from Penny-Wise office supplies.
• Save up to 5 percent on computer systems from Dell

(Posted October 2008)

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