Merchant Warehouse is committed to helping our merchants expand their business and reach continued success. With this in mind we've recently begun working with a number of prominent small business bloggers on various topics that we hope will help our expand the breadth of knowledge and advice we are able to provide through our Resource Center. The following is the first post from David Bakke, the author behind Money Crashers, who has been seen in Yahoo! Finance, CNN, Forbes, and the Wall Street Journal.
In January 2013, Americans endured their largest one-month drop income in 20 years. Household budgets have tightened up across the country and small businesses are cutting back in the face of reduced consumer spending. So, if you own a small business, now is the time to save as much money as possible. By cutting staff, you can save a ton up-front, but is that really cost-effective in the long run? Instead, get creative and consider some of the less drastic but still effective ways to reduce†business expenses:
1. Find an Advertising Partner
Marketing options for your small business are pricey, so why go it alone? Put out some feelers, find a business in a tangential industry to yours, and partner up with them to split ad space and costs for a local billboard or bus stop advertisement. Brainstorm with your new partner to come up with a creative advertising strategy that highlights the effectiveness of both your businesses, making the most of your shared space.
2. Offer Telecommuting to Your Team
Employees generally love the benefits of telecommuting for its flexibility and independence - but employers can reap quite a few benefits as well. You can reduce energy expenses at your office by using fewer lights, phones, and computer stations; slash office supply costs; and find a smaller space at a lower monthly lease rate. If you do decide to go this route, just be sure to keep tabs on your work-from-home folks to ensure they still perform at a high level.
If your website needs an upgrade, you need assistance with social media marketing, or you have some other short-term project where you would bring on a new staff member in a perfect world, consider outsourcing to freelancers. You can attract top talent without a significant cash outlay. Be sure to vet all candidates carefully, and be especially wary of choosing overseas candidates - language barriers and time zone difference could potentially hamper your efforts.
4. Streamline Your Mailing List
If you have a hefty mailing list that's receiving weekly or monthly fliers from your business, you can cut costs by deleting inaccurate addresses. Use the USPS database to weed them out, significantly decreasing your postage costs. This may not be an instant game-changer, but every penny adds up over time. It won't take a lot of time to investigate the idea, so it could be well worth the effort in the long-run.
5. Review Petty Cash Spending
You've got a petty cash fund for a reason - to have available funds for minor, everyday purchases. However, if you don't track and manage yours, spending can easily get out of control. Limit the number of employees with access to petty cash, and review all the receipts they submit on a timely basis. This could seem like tedious work, but it can add up to big savings on an annual basis.
With tax season upon us, make sure you're availing yourself of all appropriate tax deductions. Be careful when claiming the home office deduction if you're considering it, because this is one area that's closely monitored by the IRS. And generally speaking, make sure you have indisputable documentation for any deduction you take. If you're writing off business meals, you want to have the cost and date of the meal, who was there, and what business items were discussed. It's essential to save money any way you can, but the last thing you want is the IRS knocking at your door with an audit. What are you doing to save money at your small business?