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10 Cost Saving Ideas for Small Business Owners

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10 Cost Saving Ideas for Small Business Owners

By Marco Carbajo, Guest Blogger
Published: October 20, 2011 Updated: January 9, 2013

With an economy that’s struggling, every small business owner is looking for ways to increase profits, save money and improve efficiency.

The good news is there are plenty of ideas that you can find in books and articles. But rather than cover the obvious ones, in today’s tough economy you need new and creative ways to save.

Consider the following ten cost-saving ideas for your small business:

  1. Go paperless– You can lower storage costs, printing costs and improve overall efficiency by running a paperless office. By scanning documents you can send and share information effortlessly saving your business time and money.
  2. Use a 0% credit card balance transfer– Transferring the debt balance from one card to a 0% intro APR card is a great way to save money on interest charges and pay down your debt. For example, if you had a $5k balance on a card with a 17% APR and transferred the balance to a credit card with 0% intro APR for 15 months, you would save $862 in interest alone!
  3. Lease equipment– To avoid the big upfront costs you’d face when purchasing equipment consider a lease. You not only conserve your company’s cash but you can save a substantial amount of money in repairs, upgrades and maintenance since many lease agreements cover these expenses.
  4. Collect cash in advance– When extending credit to customers consider collecting a percentage of cash up front with every purchase. This will help your company reduce risk, improve cash flow and save money in collection efforts. For example, you can require a 25% down payment on all future purchases made from your net 30 account holders.
  5. Ask for the discount– The suppliers you work with may have quantity discounts of 50% or more depending on the terms. You may be able to meet these requirements and qualify for a lower price. To find out, ask about discounts and what you need to do to earn them. You may be able to get anything from an interest-free loan in the form of vendor credit to a healthy discount for paying early.
  6. Switch banks– It’s no surprise that banks are looking to squeeze more revenue out of fees to make up for all the new regulatory changes. However, Bankrate’s Greg McBride says it best, “As consumers we’re not hostage to these higher fees, but we’ve got to be on our toes and be proactive about avoiding them.” Do everything possible to avoid fees like an ATM surcharge, bounced check fees, and most recently the debit card fee. If you can cut significant costs by switching to another bank then it may be just what you need to do to save your company money.
  7. Consider bundled services- Some companies offer bundled services that include phone service, cable, internet, fax, and web hosting. Bundling two or more services from the same company can save your business hundreds of dollars per year.
  8. Use Payroll Debit Cards– With a debit card payroll system your business can greatly reduce its administrative costs. It eliminates the expense that goes into printing checks and lowers the risk of fraud. This is a major benefit since 60% of all fraud incidents within a business involve employees, according to the Association of Certified Fraud Examiners.
  9. Manage Employee Spending– The misuse or abuse of company-issued credit cards occurs among employees at every level. By setting guidelines, activating pre-set limits and alerts and monitoring your monthly spending reports you can save money and avoid costly mistakes.
  10. Offer Electronic Invoices– Electronic invoicing (e-invoicing) is the issuing of invoices by email directly to your customer. You can reduce your company’s print and postage costs if you begin sending invoices electronically.

Whether you are a start-up or an existing business, it’s important in this economic environment to do whatever is possible to look for ways to save money. Start by putting a cost-savings plan in place for your company and then take action as soon as possible.

About the Author:

Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

Comments:

Thanks for mentioning equipment leasing. It's a great way to preserve operating capital and pay for equipment over time as you generate income from it.
I agree with your electronic ways to save tons of cash in your business and the transferring of your balance to 0% interest card is a great thing to do. Those are really helpful business ideas. I came across a video that talk about how to turn your business ideas into reality. I'm sure it will be a great help to you too and it's a video from Marie Forleo.
Saving money is very essential step to consider in line with business. Let's take consideration of being a business owner of a small firm, you hold the load on how to manage spending in your company and that's definitely a hard task to deal with especially without proper preparation and knowledge. IMO, taking the full advantage of modern technology would do help make way of saving lots of time and money, just like what number 1 idea highlights. Good to follow other steps being mentioned on this article. Houses in the Philippines
The 100 # ELEPHANT IN THE ROOM! #11 Unfortunately small firms often pay more for such goods and services than large companies because of a lack of volume or scale. But there is a way small business owners can enjoy the same kinds of cost savings their big brethren do on essential goods and services: by participating in group purchasing. Group purchasing is the collective participation of many different individuals or small businesses in the purchase of products or services, thus enabling participants to benefit from discounted or group rates. While it isn’t new, group purchasing has generally been underutilized by small businesses in the United States. This may be starting to change, however, with the emergence of a number of different online consumer-group buying services, such as Globalmpg. Group purchasing offer economies of scale to their participants by aggregating their combined purchasing power. www.globalmpg.com
"Manage employee spending" is excellent advice. Just ask any store-front retailer where most of his loss comes from -- within. Employee theft and personal spending on company credit cards is the downfall of many a formerly honest person. woodpecker house
That's definitely right! We have to at least save money for our business most especially because our world economy is at huge risk right now. For business entrepreneurs who wanted some cost saving ideas, considering these simple ideas written by the author will help your start the business efficiently and effectively. Plus, hard work and good service to our valuable clients will helps us succeed and stay successful in the long run. Apartment for Rent Philippines

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