Small businesses are the backbone of any economy. Even though thousands of small businesses fail each year, for the ones that survive, there is a opportunity to become the next Walmart or Microsoft of their industry. This life blood can end up providing hundreds of thousands of job in the future. But for today, keeping your small business afloat means keeping a keen eye on the expenses, especially if revenue has decreased. Here are some great key cost cutting measures that can be applied to any business.
Examine Your Expenses: Everything is negotiable. If you are renting office or retail space, speak to your landlord. It doesn’t matter what your lease may say, too many owners of commercial property are feeling the heat as more and more space is becoming vacant. Chances are, if you approach your landlord, they will be willing to work out a better arrangement, than lose you as a tenant. The same goes for any other expenses, such as your phones, office equipment rental, bookkeeping, health insurance and so on.
Inventory: This is not the time to overbuy and stock inventory. Check to make sure that you are keenly aware of what needs to be purchased for your business. Better to place a extra order when needed, than to place inventory on a shelf and incur a expense today that could have been deferred for another time.
Cash Management: Today, acquiring money for your business, is incredibly difficult, even with good credit. What ever cash is available on hand, needs to be restricted to only necessity use. Don’t count on credit cards or a line of credit to hold you through, as many lenders are in the process or have already taken measures to reduce or close extended. If you do have a credit line available, you may want to withdraw and place that money into a separate account ,rather than take the chance it could be closed on you when you need it the most. Examine your businesses yearly track record to see how much cash is needed to be on hand for the “slow” periods.
Meeting With Your Accountant: No one knows your business better than you, except maybe your accountant. This person is a valuable tool to understand, where additional cost cutting can be done. As a person, who deals primarily with the small business community, your accountant may have some great advice, based on their years of experience, of telling of cost reduction that you might not have thought of. Your accountant can also tell you which tax laws you can take advantage of if you plan ahead. This may help your business claim more in deductions that in turn, can affect the bottom line of what you pay each year.
Pay Your Bills Timely: Many suppliers today are concerned with keeping their customer base happy, as they see more and more of them reducing orders, going to competitors or closing shop. Speak to them about giving you a discount if you pay timely.
Use Email Based Marketing: If your business involves communicating with your customer base, do it through email marketing. Use regular mail to market to new customers. Once the person becomes a client, make getting their email address part of your business routine.
For a small business to survive through a bad economy, owners have to monitor every aspect and take advantage of the down market and its benefits. By doing this, owners not only give their business every chance of survival, but they learn not to waste valuable dollars that can be put to better use.