Water Well Journal
Issue link: http://read.dmtmag.com/i/715953
E veryone is attempting to tighten belts and save money. And for small businesses, it isn't just a matter of lower- ing expenses on occasion, but actual survival. Although the following money-saving tips will be espe- cially effective for small businesses, they can also be applied to any size business and some may even help you at home as well. Lower the cost of debt The interest rate charged on debt is more important than the amount owed, so list all debts owed by your company, starting with the highest interest rate and going on down. Pay the minimums on the lower-cost debts, and pay off the highest-cost debt as fast as possible. Negotiate Always get bids from three different vendors to ensure the best deal and then ask vendors for 10% off the cost of any item you're purchasing. You may be able to negotiate better prices on everything from office supplies to the phone bill. You certainly won't lose anything by trying, and you may find yourself able to shave several hundred dollars off your monthly operating costs. It never hurts to negotiate because the vendors are asking for discounts themselves from their suppliers. Prepay expenses Prepay January and February expenses in December. The expenses will go on the previous year's taxes, allowing you to take the deduction 12 months earlier. And if you pay with a credit card, the cash won't leave your business until January. Try this for office rent or equipment you might need. The reverse is also true. If you have income coming in December, defer as much of it as possible to January so it shows up on next year's tax return. Outsource Employees are essential to getting work done, but employee costs—from salaries to office space to insurance—can be the biggest chunk of a small business' budget. Consider keeping your full-time staff to a minimum and outsource work to inde- pendent contractors for the work permanent employees can't cover as needed. You can not only negotiate a lower rate with contractors, but your business can also benefit from their more varied experience in their fields of expertise. Bartering When that cash supply gets low, as it tends to do in small businesses, don't close the door on getting what you need. Consider the age-old practice of bartering. Maybe you're able to barter with a local garage to service your vehicles in partial exchange for annual water well testing services. Go green Going green is not only a great marketing move, it's also a smart financial move. You can make simple changes such as keeping equipment on a power strip and turning it off when not in use, or replacing your existing printer with one that prints on both sides of the paper, thus reducing paper waste and cost. Since the object of many environmentally friendly changes is to save energy, and you have to pay for the energy your business uses, if you can reduce energy use you will also be reducing your costs. Open source software Software, from the basic to the complex, is essential on some level in every business today. Before you spend hun- dreds on software purchases or updates, check into the free open source alternatives. You can find open source software for everything from photo editing to invoicing to accounting, project management, and document creation. Bundled services Some companies offer bundled services that include phone service, cable, Internet, fax, and web hosting. Bundling two or more services from the same company can save your business hundreds of dollars a year. Buy in bulk Shop the cheapest deals on supplies and purchase from bulk warehouses or online suppliers to save money on both the product cost and the shipping cost. Analyze your ongoing expenses and pinpoint the ones that are purchased randomly or at middleman suppliers. Check into bulk buying and see if you can't save a significant amount on those frequently used items. Renegotiate your lease If you don't own the building in which your company is headquartered, try renegotiating your lease to save on costs. ALEXANDRA WALSH PEOPLE AT WORK CUTTING COSTS These savings tips are ideal for small businesses. waterwelljournal.com 52 September 2016 WWJ