7 Tips to Help Business Owners Cut Costs
The slower pace of the summer offers business owners an opportunity to review the condition of their businesses. Everyone wants to save money, so I suggest using this time to review all expense categories in order to look for ways to save money and reduce costs.
1. Business and Auto Insurance
Ask your carrier what you can do to decrease rates the next time your policies are up for renewal. Decreasing deductibles can be an immediate way to lower premiums. Policies without prior claims may qualify for reduced rates. Just asking your broker about potential price reductions will let them know that you are actually investigating their prices and light a fire under their.... desk.
2. Phone, internet and utility bills
We just doubled our internet speed and decreased our monthly fees by 30% by telling our internet and phone provider that we were "thinking of switching." Look at other providers while asking your current provider how they can reduce your rates. You'll find out what they are willing to do to keep you as a customer.
3. Office supplies
Sometimes the supplier you've been using may increase their rates without you even noticing. Do a quick comparison of the most used product prices' (paper, toner, coffee, etc.) against other vendors to see if you can get a better rate by switching. Often you may get a discount, bonus, or rebate just for moving from one supplier to another. Over the year this will bring your total costs down.
4. Discontinue unneeded services
Take a hard look at services you may no longer need. People often forget what they're paying for. We recently combined our storage units (used to maintain our clients' historical information) to lessen our monthly costs. During our busiest time of year I wouldn't even consider this, but summer offers time for the physical labor required to do so.
5. Ask about discounts
Ask your major long-time suppliers for discounts for early, prompt or net 10 day payments if your cash flow allows for it. A client who spends over $250k a year on printing saves 3% annually just by paying within 10 days, which is a savings of $7500.
6. Ask for better terms
Ask all your vendors for better terms. Doing so will improve your cash flow. If you have a good payment history, vendors are often willing to change terms from 30 days to 60 or even 90 days. Of course this all depends on the length of the relationship, your payment record and volume.
7. Review financial accounts
Review checking, savings and other financial accounts. For example, review your bank accounts' service charges and ask for fees to be decreased. Banks compete to acquire and maintain customers, therefore they are often willing to find ways to keep costs down and customers happy.