10 Simple Ways to Cut Business Expenses

This article was originally published back in 2010 but the principles certainly apply today; perhaps more so. It pays to read these because if even a single item can be put into practice by your company, you will increase your profits.

10 Simple Ways to Cut Business Expenses

 Cut Business Expenses graphic
by Robert  Lockard on October 22, 2010

When you’re just starting out as an entrepreneur, money is usually scarce.  That’s why you need to find creative ways to trim expenses and run your business  on as lean a basis as possible. To help you out, here are 10 simple ways you can  save money in all facets of your operation.

1. Use email instead of standard mail. When sending simple  messages, like greetings to new customers and requests to vendors, you should  use email. Most people are now happy to receive messages electronically. Save  the cost of a stamp, envelope, and paper. Small costs can add up fast, so start  by cutting the little things.

2. Print less. Ink cartridges, paper, file cabinets and  storage space are all expenses you can easily limit in the digital age. Store  the majority of your documents and data on a hard drive, scanning paper  documents if necessary. Be sure to back up all of your files and protect your  computers with passwords. Computers can be expensive, which leads to the next  cost-cutting tactic.

3. Buy used equipment. With technology constantly improving,  you can get big discounts on software and hardware that was recently replaced by  a new version. Used equipment can be just as useful as new equipment, but even  equipment a few months old will come at a significantly lower price. Search  Craigslist, Ebay, and classified-ad websites to find deals.

4. Pay invoices early. Many suppliers offer discounts for  paying invoices within the first few days of receiving them. Paying early is a  great way to build long-lasting relationships with your suppliers. However, you  need to have enough cash on hand to pay for orders when they come in. That’s  easier said than done, which is why you should take note of the following  tactic, also.

5. Reduce your inventory levels. For many companies,  inventory is their biggest expense. Getting a large number of products in one  shipment might seem like a good deal, but small businesses can’t afford to tie  up too much of their working capital in idle inventory. To help you find the  right balance of inventory in stock, you might want to use inventory  management software.

6. Increase your inventory turnover ratio. In conjunction  with the last tactic, you should also try to increase the number of inventory  turns you have each year. Your inventory turnover ratio is the number of times  in a year that you sell the average amount of inventory you keep on hand. If you  cycle through your inventory more often, you reduce the risk of products getting  too old or outdated before they can be sold.

7. Take advantage of low office rent prices. If you’ve grown  enough that you need to rent office space, you should move quickly. The  commercial real estate industry has fallen on tough times in most metro areas,  and right now is a great time to negotiate a low monthly rate for your office  space. Office vacancies are high, so property owners are often willing to fill  their space at a discount instead of leaving it empty.

8. Use Internet marketing. Are you using SEO-optimized  blogs, Twitter, and Facebook  to find customers? The great thing about these marketing tools is that they are  relatively inexpensive compared to print media. But they do require time.  Analyze who your target customers are and decide if they’re more likely to use  traditional or social  media to find you. Adjust your marketing strategy accordingly.

9. Travel less. You can save a lot of time and money by  avoiding unnecessary trips. Use online resources like Webex and Skype to conduct  meetings with people in multiple locations rather than flying or driving to  visit with them in person.

10. Hire interns. Hiring interns is a win-win situation.  Interns get valuable experience, and employers enjoy low-cost labor. Interns are  usually young and untested, so they might need extensive training on your  software and procedures before they can get to work. Keep this in mind when  weighing the costs and benefits of this tactic.

Hopefully these 10 ideas will help you reduce your costs and thrive, no  matter how big or small your business is. Since you’re on this site, you already know that minimizing energy expenses can amount to a sizable savings as these actual energy savings prove.

Read more: http://blog.intuit.com/money/10-simple-ways-to-cut-business-expenses/#ixzz2jagCbzrg