How to Painlessly Cut Costs in Your Small Business

By Katelyn Smith • February 22, 2011 at 10:32 PM

With any small business, or large business for that matter, there are periods of demand and periods of lulls. Whether you are attempting to cope with monetary loss, or just trying to cut costs, there are a few ways you can save money without enduring a painful change.

One of the easier ways to do so is to begin by managing your transportation costs. Now with fuel prices up, making sure that you are cutting back on your transportation can make a larger difference than you may think. To do so, ask yourself a few questions: Do all of your sales calls need to be in person? Have you analyzed your delivery routes and call schedules? Compared fees charged by third party shippers? If you have not, there is a significant chance that you may be wasting money.

One of the most painful cost cutting happens with lay-offs. Not only may there be a sense of guilt when laying someone off, but you're losing one of your most valuable resources: people. A way to avoid this from the beginning is to cross-train your employees. This will also come in great value when another employee calls in sick or has an emergency because instead of calling in for temporary help, there are other members of your team that are capable of stepping into other roles. This can have added benefit if your operation is subject to fluctuating workloads. For instance, perhaps your bookkeeper is always busy at the end of the month but has a lighter load mid-month and could help out with marketing projects.

A fantastic way to create a more efficient business and free up your employees time is to implement a document management system. This eliminates the timely and costly filing and retrieving of documents. A great illustration of this is Fletcher Jones Mercedes-Benz in Newport Beach, California. Implementing DocuWare saved them over $40,000 annually as well as countless hours of their time and resources.

Another painless way to trim some costs is to ensure efficiency in your marketing plan. Two extremely simple ways to do this is to cut out the middleman. Whether this means cutting out the mail system by sending E-Newsletters, or cutting out the print shop for house-made flyer's and advertisements, it all means savings. This will leave you with more money to invest back into your marketing and advertising, which is in fact one of the most important aspects of business. No one will buy something they don’t know exits.

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