In good times and bad, it is always a good idea to look over your business costs. Keeping an eye on the bottom line means watching both the income and the expenses. Here are the hottest ideas my clients are implementing right now.
- Get rid of your long distance provider. VoIP has come of age; the reception is clearer and reliability is greater than even a couple years ago. A number of my clients have removed their home/business land-line phones in favor of VoIP phones and cell phones. The VoIP phone works fine as long as your Internet is up. Check out Skype or Broadvoice. We use BroadVoice Unlimited World Plus at www.broadvoice.com.
- Put in a thermostatic timer. Heat your house/office/home office to 62 at night and your home office to 68 only during the morning and evening hours when you are using the whole house. If you sit in an office during the day, just run a small electric heater in that room with the door mostly closed. The cost of running a portable 1500 watt space heater for about 5 hours daily during a 30-day month is $9 (at a typical 10 cents Kw/Hr). A heat pump covering the whole house can be 10 times that much. See http://home.howstuffworks.com/question272.htm.
- Check your credit card processor. Generally, a 2% fee is pretty good. If you are paying substantially over that, you may be paying too much. A good, quick explanation of fees can be found at: http://transfs.com/blog/2008/11/06/nytimes-covers-credit-card-fees-impact-on-small-business/
- Save on Gas. The website below shows the daily price for fuel in your area by zip code. http://autos.msn.com/everyday/GasStationsBeta.aspx. The difference in our area between the highest and lowest was 29 cents a gallon, about $5.80 per fill up if you have a 20 gallon tank such as a business Small van or SUV.
- Avoid new debt. Companies that fail to control costs often increase debt. The interest cost and monthly payment on that debt then becomes another cost, which cuts further into profits. Catch the trend early by watching your business dashboard. See my article on business dashboards at http://www.captureprofits.com/your_business_dashboard.html.
- Barter. It not only helps you conserve your cash, but can help sell more of your products or services. Join a barter network, such as Corporate Barter Network at http://corporatebarteronline.com/ and you have thousands of businesses that trade between each other.
- Ask your employees. Your employees know the ins and outs of your business and are often willing to share. You don’t have to pay a lot for their ideas. Simple gifts like a box of cookies with public recognition will help your employees feel appreciated. Don’t be afraid to ask them for fear of spreading concern; a good business owner is always looking to be more profitable. A suggestion box with forms nearby will make it convenient. It may take a couple months for them to supply you with ideas, but keep reinforcing it and they’ll catch on if the spirit is positive.
- Track your costs. Set aside time each month to look at costs with an eye to finding some area, no matter how small, along with a willingness to keep an open mind. You’ll be surprised at what you’ll find each month.
- One step at a time. Pick one thing to do each month. Small business owners already had a full time job before taking on cost cutting. Also, while very important, you don’t want to take so much time that sales suffer.
It has become very trendy to be a cost cutting business owner. Join the trend and see your business profits improve even if your sales are not.
Merra Lee Moffitt, AWMA, CMFC, CFP® spends all day, everyday business owners reach their financial dreams and goals by capturing small business profits. She can be reached at, 888-920-2030 or by email at firstname.lastname@example.org.