How to Cut Your Business Costs

Layoffs are splashed all over newspaper headlines. And while no business owner likes having to go that route, some times it may be the only way. But before you get to that point, figure out how to make your business run leaner, and take these tips with you even after the economy picks back up. You'll find that learning to cut costs now is a valuable lesson in how to keep your business engine running for the long-haul.

Leases

Unless you are a home-based business, you are most likely renting space. In such case, you may be able to reduce costs in a big way if your lease contract is coming to term. Because, few deals are going down right now in the commercial real estate industry, landlords are willing to bend quite a bit if it means keeping a tenant at their property. This tenant's market can be seen in the number of concessions being offered in the form of free rent (ranging in the number of months), tenant improvements, cash back, reduced rent, etc.

Just beware when negotiating the terms of a new contract. Even if your landlord agrees to reduced rent there could be a clause in the contract that says when the market returns you will have to pay back the lost rent. In such case, you are in the position to look elsewhere for better terms. This is where a real estate attorney and broker come in handy.

Right now, landlords are even talking to tenants whose contracts are not about to expire just to make sure that when the contract does expire, that tenant is interested in sticking around.

From a business perspective, rent is often a big expenditure, so if you can reduce this cost, that could help your bottom line in a big way.

Going Green

Going green is the big thing right now along with cutting one's carbon footprint. If you can afford to pay some slightly increased costs upfront for items such as CFLs to replace incandescent light bulbs or switching to recycled inkjet cartridges (which actually come out cheaper to begin with), you will save on costs in the long-run.

Additionally, little things we take for granted, such as telling everyone to turn their computers off at night or reducing how much we print, can also reduce expenditures significantly. Ask employees how important it is to print out an e-mail.

Other green cost-cutters include motion sensor lighting or GreenPrint software (eliminates pages that you don't actually need printed and separates them from the ones you do need printed). The software can be found at www.printgreener.com.

Office Supplies

The cost of office supplies, in general, can add up. Items such as pens, hi-liters, paper cups, etc. end up being thrown out once their use is up. So, why spend big money to only have it thrown out later on.

With coffee, a big expenditure in some offices, tell employees to bring their own mugs to keep in the office, and say good-bye to paper cups (you're also helping the environment).

With you office supplies, sometimes it helps to go through a chamber of commerce or some other small business association. You can order supplies as a group to buy in larger quantities and get the better discount. Additionally, brand names aren't everything.

Travel

Carefully evaluate and track where your employees are going. Yes, it's tough having to cut travel expenses, but if they or you don't really need to go, there's no point in you paying for the time away from the office.

Software

As a small business owner, software prices can be your worst enemy. So, ask yourself, do you really need to have the latest and the greatest? Oftentimes, some business owners or their employees think that in order to run smoothly they need to buy the right software. I've heard of employers who don't invest in archival systems. Rather than have their employees create folders and label documents in a smart fashion. When something needs to be retrieved, employees are instructed to run a search via the hard drive. Simple.

Learning how to be efficient and organized with your own DIY system, doesn't mean you're a lesser business than the next company out there. It means you're smarter for reducing costs. At the same time, don't sacrifice the growth of your company to pinch mere pennies.

Additionally, you may want to investigate free software, and see what is available to you at no cost. You'd be surprised at what you find.

Marketing

The cost of hiring a good public relations team to do the marketing for you can be another stab in the chest when you're evaluating expenses.

To have a marketing team can be great if you don't know the first thing about branding, but you're an entrepreneur. Innovation is in your genes. So, learn how to market yourself. With the web, and things such as Facebook and Twitter, it's not difficult to amass new customers and have the ability to send out e-mails advertising your goods at a moment's notice. Yes, it may cost you more time, but understanding the technology is a plus, because that's the direction marketing is heading. Sending out a Twitter = good; sending out a stale press release = ho-hum.

Network

Cast a wide net of other small business owners, and you'd be surprised at how willing other people are to help you out or give you tips. Use these relationships to save yourself money. Join your local SCORE chapter, or start your own club or get-together for local business owners.

Remember, that while it may seem like you are alone in getting your business ahead, no one gets very far or is able to sustain for very long with no help from anyone.