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Small business cost-cutting tips

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Small business owners feel the sting of large expenses because it comes right out of their pocket. When you make money, you pay for your expenses (wages, equipment, rent) and then you get to pocket the rest. The problem is when small business owners start pocketing too much money. Since you are in charge of your company, you need to learn how to be a good manager for your employees and for yourself. If you cannot control your personal spending habits, how do you expect to control the spending of your company? Here are some cost-cutting tips that can help your small business become profitable and avoid the red zone:

Travel expenses
When you travel, what type of hotels do you stay in? Do you go out to eat at nice restaurants because you have the justification that "it's on the company"? Travel is one area that you can trim down. Start by taking connecting flights instead of direct connections, they are usually cheaper. Don't stay at the Marriot; try a Best Western or another hotel that offers the same services you need like Wi-Fi and a place to sleep. You may be able to stay at the nicer hotels by using travel web sites to find deals. Call the hotel and negotiate for a lower rate, tell them you are a business traveler and you plan to visit their hotel frequently if they offer you a cheaper rate. Another word of advice for travel cost-cutting, don't eat out. Go to the grocery store and make your own meals or purchase a frozen meal that you can microwave in your room. Try to avoid paying for meals when you go out, let your clients pick up the check, especially if you flew out to see them.

Equipment
One area you can save a lot of money on is to lease your equipment instead of purchasing it. While you may not save money in the long-run, it will impact your direct costs today. Keep your eye out for equipment that is dropping in price because it is last-years model and people won't buy it because they want to newer model. You can save a ton of money by purchasing used supplies that are still in good condition. Check the newspaper and discount web sites if you need to purchase large equipment.

Rent
Depending upon the size of your small business, you may be able to move it into your home. This can save you thousands of dollars on rent each year and it gives you a little flexibility with your office hours. Of course you will need to provide adequate space and facilities if you have employees that will be working out of your home office. You may also consider moving to an industrial site instead of a commercial one, there are a lot cheaper options with industrial sites and you normally get a larger space to use.

Shop Around
One area you can save money is on your supplies. How much money are you spending on your utilities? VoIP phone services are a lot cheaper than a traditional phone line. If you do a lot of faxing, try using internet faxes instead of a dedicated fax line. How much money are you paying in health insurance? If you haven't taken a look at your health insurance costs for a long time, you need to. Health insurance costs are always higher for small businesses, but you can find a plan that is a good $150 a month cheaper by increasing your deductible. Another place you need to cut costs is with your current vendors. How much are they charging you in shipping costs? Try to work out a deal to get free shipping by ordering in bulk versus smaller orders.

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Posted by DF
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