In these trying times, small and medium businesses are trying to keep up with the mighty corporations looming over them. When budgets and profits decrease, businesses need to compensate. The following are some cost efficient cutbacks.
5. Jump on the “Co-Opetition” Train.
Money Crashers define co-opetition as creating relationships with other small or medium business orders to help cut costs on supplies and other goods. While it is a good way to be thrifty, having good relations with other business owners may also prove to be advantageous in the future. But remember, with every partnership you need to give as much as you take.
2. Analyze your expenses and see where you can cut back.
Sometimes the little costs add up, so analyze everything. Can you buy less supply more frequently or go paperless to decrease printing costs? Moreover, analyze the services and supplies that you already use, and see if you can bargain for lower rates. If not, try to shop around and use competition to spark a desire to negotiate. Also, get rid of unnecessary equipment, especially ones you continuously pay for or lease. You may not absolutely need that extra fork lift or heavy duty printer.
3. Use your real estate.
Whether you realize it or not, you are sitting on a treasure trove. Again, if you’ve been a steady cash cow for your landlord, try to negotiate for lower rent. Develop a good relationship with him or her, so that a negotiation may not be as awkward or as difficult. If that doesn’t work, then look into subletting any unneeded space.
4. Cut employee costs.
While this may not be the popular choice, it is a good way to cut back costs. But before you tap into your inner Apprentice, try cutting pay first. Other cutbacks can include unnecessary employee perks or benefits. You can also trim your work week or day, which would drastically decrease costs all around. Have a trial period before you commit to anything. Finally, try employing interns or students. They don’t have to be paid as much and will be grateful for the experience.
5. Increase marketing without increasing costs.
While conventional marketing may be costly, there are other more cost efficient methods. Using social media, for example, can be a great channel to promote offers, products, contests, etc. You can also use your customers to do your marketing for you with discounts if they bring a friend. Take a look at some other marketing techniques on Nolo.com.