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Practical Money-Saving Tips For Small
Businesses
© 2002 Diane Hughes
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One of the primary concerns all small businesses have is
saving money. When it's time to trim the fat, most look
for one giant expense to decrease or eliminate in order
to stay within budget. More often than not, it doesn't
work that way.
Most budgeting experts will tell you that re-evaluating
your overall expenses and cutting each by just a bit will
actually gain you more ground than doing without something
major that you really need. Here are a few ideas of areas
to look at and costs to reduce that can have a major
impact on your overall profits.
1) Internet Access
- Every online business owner must have
access to the Web. But consider this. The
market is so
flooded with ISPs that you have a lot of room
to dicker.
Start by searching the Internet under keywords
like
"cheap internet access" or
"discount isp" to bring up
lists of possibilities. Then, do one of two
things.
(a) Try some of these independent ISPs. Smaller
companies
can have high quality service and support
just like
the "big boys". One business
owner I know recently
switched from Prodigy ($21.95/mth) to a
smaller ISP
that only charges $12.50/mth with no
contracts. She
actually liked the new provider better
and it costs
her about half as much. [Savings of
$113.40 per year.]
(b) Renegotiate with your existing ISP. Most larger
ISPs
know you have a choice of a thousand
other companies.
Because of this, they are normally more
than willing
to renegotiate your costs. Be honest.
Tell them you
are a small business owner and you need
to cut expenses.
Explain that you've been pleased with
their service but
will be forced to go with someone else if
some sort of
arrangement isn't worked out. Another
friend of mine
did this and received 6 months free! Most
will offer
2-3 months free and/or a discount with an
annual
agreement. NOTE: When you approach your
ISP, be fully
prepared to switch to someone else if
your offer is
rejected. [Savings of $105.80 per year
with 3 months
free and reduced, annual rate.]
2) Switch From A Merchant
Account To A Payment Service -
If you have a low volume of credit card
transactions,
it might benefit you to switch from a merchant
account
to some sort of payment service like Pay Pal or
ClickBank. Statement fees, monthly fees,
discount
percentages and the like can all add up to big
money.
While payment services normally have reduced fees, they
do have higher "per transaction" costs so you'll
have to
do some math to find out if this is a good idea for your
business. Just take an "average" invoice amount
from a
sale and multiply it times 12 to get a base total to
work with. Now, add in your 12 months worth of fees for
statement, monthly access, discount percentage, per
transaction cost, etc. This is your "example"
total.
Do the same with several payment services using their
costs to see which one, over time, would be less
expensive for you.
If you were paying a $15 statement fee, $20 monthly fee,
3% + $.35 per transaction and $25 monthly gateway fee,
your annual expenses would be $742.20 for an average
transaction of $50.00. Your annual fees for a payment
service with 3.5%, $1.00 per transaction and a one-time
$50.00 set up charge would only be $83.00 per year.
[Savings of $659.20 per year.]
3) Re-evaluate Your Long
Distance Costs - Competition is
the small business owner's friend! With
hundreds of
long distance companies out there, you can
drastically
reduce your charges instantly. Again - use the
'Net to
search for inexpensive long distance service. A
business
owner I know changed from a MCI
"program" to one of
those 10-10 companies and reduced her per
minute charge
from $ .07 to $ .05. Depending on the volume of
calls
you make, some programs offer rates as low as $
.03 per
minute. [Estimated savings of $20-$30 per year
for
1,000 minutes.]
From just these three little things, we've saved an
estimated $802.60 per year. That's enough to make anyone's
spreadsheet sing! Go through your list of costs and you
will most likely find other expenses that can easily be
reduced with a bit of research and a phone call or two.
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Diane Hughes is an accomplished internet entrepreneur and
editor of the popular ProBizTips Newsletter. Subscribe to
her newsletter for more tips, tricks, and secrets of the
trade -- plus get HUNDREDS of eBooks, software and tools
just for subscribing! http://viralmarketzone.com/diane
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