Summer 2010

Where Expense Reduction Meets Innovation

Where Expense Reduction Meets Innovation

All small business owners know that cutting expenses is important to increasing cash flow and profits, but with new technology available, business owners can reduce costs while becoming more innovative. Business research reports show that innovation over the next decade is essential to the survival of small business.

Small businesses must adapt to expanding technology; communication is increasingly done via email, procurement resources are online, contractors are sending bid notices via email and asking bidding contractors to bid through online systems.

But using this technology is not costly, it just requires adaptation.

Below are some tips to reduce expenses while improving your business systems:

Get rid of your dedicated Fax line. Most business owners are using email to send documents rather than using fax for communication. To send SECURE documents (RFPs, bids, etc.) via email; convert document to PDF format. There are a number of PDF conversion options including having a scan option on your office printer, to uploading software (e.g. Cute PDF Writer) to your PC. Once you have converted and saved your document to PDF format, the document’s contents are locked for changes and you can email it securely.

Another alternative is to use office PCs with Microsoft Windows XP operating system and Small Business Server. You (or your IT provider) can simply configure your software to send and receive faxes. If you have a dedicated fax telephone line, you can eliminate that cost using this option.

Use a free hosting service for your website. There are many options, and if you are in business to succeed, you NEED a website. Look into HostMonster, GoDaddy, iPage and FatCow.

Buy recycled printer cartridges. Printer ink is one of the most expensive liquids on the planet. Much of it is margin, so ask your provider. If they don’t sell recycled, find one who will.

Recycle paper. Reuse printed documents (agendas, drafts, notes, etc.) that you would normally throw away in your printer’s bypass tray to print documents for internal use only (drafts, internal agendas, etc.).

Reassess your phone plan. Telephone service providers have become very competitive; you can get service for cents per minute depending on your call volume.

Eliminate unnecessary lighting. Install inexpensive motion detectors to control lighting in frequently unoccupied areas, such as restrooms and copy rooms. And, install timers on outdoor lighting systems so they only operate from dusk to dawn.

Turn off equipment when it's not being used. This can reduce energy consumption by 25 percent; turning off the computers at the end of the day can save an additional 50 percent.

Use Portable Computers. If possible, use laptop computers. These portable computing machines consume 90 percent less energy than standard desktop computers.

Check in with your vendors. If you have been using the same vendors for your business needs (office supplies, etc.) without reviewing their pricing every 3 – 6 months, you may be missing out on savings. Also, before using a membership plan for a “big box” office supply retailer, check to see if a smaller supplier can beat their price on all the items you purchase.

Order office supplies on a fixed schedule, as needed. Unless the supply is essential, limit ordering until you can meet an amount that will provide free delivery/shipping.

Initiate a consistent accounts payable system. Set up your accounts payable system to pay monthly expenses twice monthly; for example, on the first and 15th of each month. This will help you manage your cash flow and monitor your expenses.