Reduce Your Business Costs and Grow Your Profits
Edited by Monika, Graeme, Lynn, Eng
Are you at the beginning of developing your business or have you been running a while and need a new direction or boost?
You are probably already computer savvy and you could save part of your start-up or running costs by using some of the tips below.
Generating savings is always easier than generating extra income, so look at the tips below, and you may be able to use them to trim expenditures.
Money Saving Tips
- 1You may have friends who could help you in some areas of the business, so find out who can help you with particular problem areas, then ask them for their help.Advertisement
- Maybe you know a lawyer who would give you a bit of free advice.
- A friend or family member who is a computer technician might be willing to build a computer, set up a computer network or even build a website for your business, either free of charge or at a reduced rate.
- Friends and family are often glad to help out for a short while in times of need. You may, of course, be asked to help them at some point. In fact, you could offer to do something they need in exchange for their help.
- 2With a new computer there is usually software you can try for a given period of time such as Microsoft Office.However, people are often surprised when, after 30 days of usage, the software dies and a box comes up that says "Click Here To Pay". They will often acquiesce to that buying demand without realizing, or even looking for, an alternative product that could be downloaded for free or going back to the older version they used to use.Advertisement
- A case in point is Open Office, an open source package from Sun MicroSystems, it is very similar to Microsoft Office, easy to learn and free.
- 3Avoid getting caught in the trap of, "My business has started making money, now I can buy stuff on credit".Debt, especially credit card debt, should be resisted and avoided, if you can avoid it. If you do need to use a credit card for purchases for the business, get in the habit of paying off the card completely every month. You'll save yourself interest charges, overdue fees, late charges, etc.
- If you set up really good money management habits at the beginning, you are unlikely to get into financial trouble later on, and you save money in the meantime.
- 4A software program that keeps track of your accounts is great, but only if you use it.Also, invest in a professional accountant for tax returns and financial advice. They are almost always worth the money because you will actually save since they know the tax rules, and can help you avoid paying too much. Ask your accountant which accounting software he or she uses and then purchase the exact same one, and use it. When the end of the tax year comes, he or she can take your data away on a pen drive, and do the calculations and reports through the same program.
- Doing it this way saves money on his or her time charges and allows him or her to save you money by using the tax rules to your advantage.
- 5Keep receipts of all purchases related to your business, especially receipts from your business start-up period.It may be possible for your accountant to write off these costs, or depreciate capital investments, thus reducing your tax burden.
- Personal expenses can sometimes be used if they relate closely enough to the business. Think carefully about receipts before you throw them away or you could be losing valuable offsets against the taxes you have to pay. Are you using your home connection to the Internet, domestic heating, electricity, telephone or transportation for work purposes, for example?
- Depending on where you live and work, you may be able to set a large portion of these bills against your state and/or federal tax liabilities.
- 6If you are planning to buy a product from an online website, check price comparison websites first to see if the company you intend to use has the best price.
- Don't forget, some sites like Quidco UK, will offer you commissions on purchases, so check this out when doing your comparisons.
- Include delivery and next day delivery charges, special taxes and any other charges, in your comparison calculations.
- Although most companies frown on this or won't let you do it, it might be possible to sign up as an affiliate for the company from whom you want to purchase goods. Then, buy the goods and obtain a discount through your affiliate link. Be sure to read the small print before signing up or purchasing this way.
- 7Do you have specific skills that could help someone else in their home or business?If you do, it may be possible to trade those for the skills you need, saving you both money, a definite win-win situation.
- Websites like, Fiverr.com and freelancer.com offer to do small jobs for a minimal amount of money. For instance, if you need something fixed on a website or within a specific program, or articles written for a website, etc., go onto these or similar websites to get details of what people offer.
- 8Have you looked for free trials?Quite a few companies offer free trials on various products. Sometimes that will be in the form of 7-31 days of trial before purchase. Dreamweaver, for example, offers a 30 day trial of their web design software with which you could build quite a sophisticated website with very little coding knowledge.
- Check on Google for free products or free trials of products or services, and you will be amazed at what you can find.
- 9Are you looking for a domain name?Search around; there is always someone offering domains for 99 cents for the first year, a great price over their normal charges of $9.99-13.99. Your savings could be significant, especially if you need several domain names. Some of these deals include domain hosting, which you can change at renewal time or whenever a better offer comes along.
- Keep in mind, your savings could be wiped out if there are cancellation or transfer charges.
- 10People always want the best specifications for a new computer, but this could well involve paying much more than you need to.Have a good look at the models that are heavily discounted because they may be three to six months old. They may be technically "out of date", but for most of us, they will be lots better than what we had. You can save some serious money by checking out this option.
- 11Sign up with an auto responder email service and create an FAQ (Frequently Asked Questions) page.Set it up on your main customer service email address. Add a note within the auto responder, telling customers that if their question is not answered by the FAQ's, click here and you will contact them personally to deal with their query. This will save you lots of time dealing with customer service queries that often ask the same questions, and leave you more time to run your business.
- 12Check out local ISPs (Internet Service Providers).The market includes lots of ISPs and some are better than others. Check their prices, read their terms and conditions, and decide which one could be best for you, ask friends about the ISP they use.
- Avoid any that charge a disconnection or transfer fee if you change to another ISP. They might make it difficult to move when you want to. You could also ask your existing ISP if they would re-negotiate a lower rate for you. You could start by saying that the service has been great but the recession is biting and you really need to find a cheaper service. They want to hang onto existing customers, so you stand a good chance of getting a reduction. If you don't ask, you don't get it!
- 13Many ISP's offer business bundles that allow you to have a fast Internet connection plus long distance and local calls for little more than just the Internet service.Check out their individual charges versus the bundle price, and you could save quite a bit.
- 14Traveling can be expensive.If you are planning a trip, whether close to home or at a distance, check the Web for prices. Check out Travelocity, Expedia and several other independent web sites, as well as airlines' websites for special prices.
- 15Whether you are married or single, cooking at home saves loads of money, as well as often giving you better and healthier meals.Eating out is very nice, and yes, you don't have to do the dishes, but it is always more expensive than eating in.
- 16Time is money, don't forget to calculate what you are worth to your business.Your time is valuable and you need to work out an hourly rate for yourself and calculate that into ALL your business decisions. Say you calculate that you are worth $20 per hour; make sure you factor that amount into all of your business actions. Once you know your hourly rate, think about delegating tasks that could be done by someone at a lower pay grade so that you spend your time on tasks that require your expertise rather than wasting time on things that won't earn enough to cover your time.Advertisement
- You must learn to value your time because if you don't, neither will your customers.
- It is never easy to make large cuts to major elements of your business, but a number of small cuts like those mentioned in the tips above could save significant amounts of money and, in reality small changes are more likely to work for your business.
- Every cent you save is an addition to your profits.
- If you have problems with any of these steps, ask a question for more help, or post in the comments section below.
Recent edits by: Lynn, Graeme, Monika