I received great feedback from last week’s note about the simple ways any small business can cut some costs, at least temporarily.
It can be lonely as a business owner, and I’m continually grateful for the coaches and mentors in *my* business. And I don’t want to think too highly of our relationship, but I should say that I know a thing (or three) about cash controls.
Before I get into it though, I’d like to remind you about how you should see this whole notion of cutting costs, first — because there’s a “right” way and a wrong way to do it.
As I discussed last time, it’s not always a good idea to chop an expense which provides a significant engine for growth and relationship with your clients. I’ve seen it a bunch — ESPECIALLY with marketing and sales. These are (usually) the *primary* engines of growth for your business. In times like these, you cannot afford to be the doctor who amputates the wrong limb (forgive this grisly analogy — but it does fit).
You want to cut the right items if you’re facing a crunch.
And again … a reminder about your mindset while doing so — perhaps related: cost-cutting should be seen as a temporary measure. The way to break through a tight cashflow is to re-invent your sales process and fix the SALES problem.
But all that said, here are some more ideas for you.
Stephen Venuti’s Four More Strategies To Consider For Cost Cutting (Part 2)
“One can never consent to creep when one feels an impulse to soar.” -Helen Keller
In part 1, I gave explanation for the following three strategies for cutting costs during periods of tight cashflow:
1. Use One Fixed Expense To Replace a Monthly Cost
2. Deduct for Tangible Assets (Section 179)
3. Creative Employee Compensation
If you missed last week’s Note, click the Blog button above to check out my previous post. Here’s the next batch of strategies:
4. Use Group Purchasing
Sometimes you have to lie down with competitors for survival. Group purchasing organizations like the local Chamber or trade organizations negotiate on behalf of their members to get better deals on everything from employee benefit programs to office supplies. Buying in bulk lowers everyone’s rates–and these deals are often-overlooked because of the perceived hassle. But they’re often worth a shot. Check it out.
5. Creative Shipment Options
Do you send out lots of packages? Well, you can often cut costs by switching from the free boxes used by the United States Postal Service to lighter, bubble-protected plastic envelopes. While you may have to pay for the envelopes, the difference in weight can be so significant that it costs less than using the free boxes. If you get a package down from one pound, one ounce to less than one pound, the saving for priority mail can be significant on a per-package basis. Take a look at how you’re mailing out your product.
6. Information Technology Savings
Do you conduct conference calls or webinars? You could pay as low as $47 a month for conference-calling services offered by the likes of Instant Teleseminar, which allows you and 20-500 callers to convene via phone and Skype, and more by webstream. There are more and more alternatives to GoToWebinar and GoToMeeting coming on the market, and many of them are very good.
Or, you can take advantage of Google Hangouts, which provides smaller functionality, but completely free.
7. Try Bartering
Currency can take many forms in an economic downturn, or slow recovery from one. I know of business owners who trade services for warehouse space without ever involving actual money. To find willing participants, check out bartering networks like Itex, the National Association of Trade Exchanges and the International Reciprocal Trade Association. You can specify what you can give and what you’d like in return–or simply throw out what out you’re offering and see what comes back.
We love serving Newtown Square, PA businesses — and we are dedicated to their success in their bottom line, and all other measures. THANK YOU!
Feel very free forward this article to a Newtown Square, PA business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Newtown Square, PA families and business owners. And we always make room for referrals from trusted sources like you.
Warmly,
Stephen Venuti
610-353-0686
Stephen J. Venuti, CPA, MST, LLC
