Q & A: What are successful cost-cutting solutions in small business?

How long is a string? Let me give you some pointers here, but please remember you can always do more on the cost-cutting front in any small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants.

  1. Keep your staffing level low. As much as it may hurt, work longer hours yourself, until extra staff is economically viable.
  2. Outsource all non-core business activities. This will reduce your fix-cost structure, make your small business more flexible and you can react faster to an economic down-turn.
  3. Buy second hand. Do you really need the brand new van? Or computer, or……
  4. Work from home, this will not only cut your cost, but may improve your work-life balance at the same time.
  5. Let your staff work from home. No office cost, hire a room if you need to on an hourly basis.
  6. Use online technology, so you don’t waste time and get distracted.
  7. Focus on your core business and sales. Every distraction costs time and money, sales generates money.
  8. Bootstrapping. Think before you spend a penny, could I borrow, hire or do it online, get creative.
  9. Analyze your fixed cost every month. You will find things you don’t need – trust me you will.
  10. Compare and get new quotes. Even if you need the service or product from your supplier, check others all the time, insurance, telephone, utilities, etc.
  11. Get better payment terms. Ask to pay in 60 or 90 days, or get an early payment discount.
  12. Check your bank charges – you’ll be surprised. Or have it done on a results basis, doesn’t cost you time and gets you money back.
  13. Do credit control – get your money in lower your bank overdraft cost and charges.

This is only a short list of what you can do, but it’s a start. Remember even $100/£50 per month is $1200/£600 a year more in your pocket. ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below – I’d be most grateful.

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