Boy, are we in trouble. From Wall Street to Main Street, the global economic crisis has completely destroyed our notion of security and faith in the banking system. With the collapse and nationalization of major banking players and the difficulty of obtaining credit, it is even more important than ever before for small business owners to find ways to cut costs and slash expenses.
Here are some money saving tips to help small business owners save thousands of dollars during the economic downturn.
Money Saving Tip 1:
Sell your products online.
Worried that you don't have the budget to invest in a fancy website and expensive web designers and developers. Take a cue from hundreds of other small business and sell your products on Yahoo! Auctions and eBay. Why is this such a great money saving tip? Even if the website will take a cut from your sale, it is still generally cheaper than having to pay for the overhead of a traditional shop. If you are in financial trouble, you may want to consider closing down your shop, operate from your own home, and sell online.
Money Saving Tip 2:
Save on advertising by joining newsgroups.
Take advantage of all the free advertising the Internet has to offer with this money-saving tip. Find newsgroups that are popular with your customer demographic, register, and join in on the conversations. The best thing about this money saving tip is that it doesn't cost a cent. It will, however, cost you time and effort that may be better spent doing something else. And time is very important to the small business owner. My take on this is to employ people who can do this for you. Did you know that you can outsource this to someone overseas for about $4/hour?
Money Saving Tip 3:
Buy used office equipment.
Believe it or not, this money saving tip is one of the easiest to implement and the one that can save the most money. Buying used computers and furniture can save you up to 60% of your budget, which you can use elsewhere in your small business. Check the classified ads if you are not sure where to get them. Make sure that you also consult people who know a thing or two about office equipment. You may end up buying models that are too outdated with no available parts and are no longer supported by the manufacturer.
Money Saving Tip 4:
Work from home.
Not only do you save on rent and other utility expenses, small business owners who choose to work from home can avail of massive tax deductions. You can declare a percentage of your rent or mortgage as a business expense and take advantage of a tax cut. For more information on this money saving tip, check the IRS website.
Money Saving Tip 5:
Be wary about giving credit.
Why are we having a financial meltdown in the first place? Be very careful about giving credit to your customers especially with a lot of businesses (big and small businesses alike) going bankrupt right now. Taking the time to check your client's credit background today may very well save you a lot of headaches in the future.
Money Saving Tip 6:
As a small business owner, it is probably tempting to stick with the same supplier just because he has been with you forever. This, however, may not be good for your business. The next time you make a purchase, seek out three suppliers and ask for a proposal. You may find out that your current supplier is actually charging you a higher margin than his competitors. You may also re-negotiate with your supplier to lower down his prices because of the credit crunch. Remember that there are also a lot of hidden costs when switching suppliers. This money saving tip can save you hundreds if not thousands of dollars.
What about you? What's your money saving tip as a small business owner?