In today’s market, every business manager and entrepreneur is trying to figure out creative ways to cut operating expenses.   The only problem is that not everyone really knows how to go about doing it effectively.

Usually, executives and entrepreneurs are busy running around frantically, trying to keep their customers happy, making new customers, solving product issues…the list goes on and on, as I’m sure you know.  If you are a business owner or manager, you probably wear a lot of hats - and usually have more than one on at a time. You’re swamped and you just need a break. 

Here’s your break.  I’ve compiled a list of simple and effective ways you can cut back on your operating expenses without sacrificing your company’s performance.  These are fairly easy to implement - and for the ones that take up more time - well, we’ve got ways for you to handle those too.  Read on for more.

Go digital!  Is your rent costing you your business?  If possible, take your business online - completely and get rid of the biggest entry in your operating expense ledger.  If you have a business that relies on people coming in to touch and feel the merchandise before buying, then of course, this is not for you.  But if you open your mind and really think about it, most businesses could probably operate mostly - if not exclusively - online.  Furniture stores, office supplies, clothing…the list is infinite.    

Market your business online.  It’s so easy and this is a must for future survival, in my humble opinion.  If you’re a mom and pop shop selling fine antiques in a small town and get your customers mostly through word of mouth, and you don’t want any extra business, then fine - stay offline.  But think of all the other customers worldwide who are looking for the one-of-a-kind items that you sell.  You could be selling your wares to people from Greece to New Zealand!  Find inexpensive, qualified freelancers on www.Elance.com and www.Guru.com.

Another way to cut operating expenses is to re-evaluate your phone plan and carrier.  If you’re a business with fewer than 10 people, you could switch your plan from a business level to a family plan.  It’s the same plan, just less expensive.  Talk to your carrier. If they say it’s not possible, switch your plan to a carrier who will.

Office supplies really cut into the operating expenses, don’t they?  Minimize this by buying your office supplies online.  Look into www.FatWallet.com and www.Roosster.com for different places to buy your office supplies from paper to flat screen TVs. 

Electricity - next to rent, it’s probably the biggest “eater” out of your operating expense budget.  Before you do a major overhaul, get an audit.  They’re free, and the electric company has a lot of great tips.  One sure way to save is to have everyone turn their computers off - completely off at the end of the day.  Turn off lights in rooms that are not in use - do you really need the lights on in your office in broad daylight when you’re out to lunch?  Simple common sense will save you a ton on electricity.

If you don’t have the time to renegotiate contracts with your vendors, shippers, distributors…etc. and you need to cut back on your operating expenses desperately, look into hiring a specialist.  Some specialists can save you 30-50% off your existing operating expense budget.

When the money is rolling in, we don’t think too much about reducing business expenses.  There’s too much to do, profits to make, and we’re busy, busy, busy.  Now that things aren’t so busy, we have time to stop and think not just about how to reduce our business expenses and still make a profit, but we see how much waste we actually make when we don’t make an effort.

Here is a list of ways you can reduce your business expenses while simultaneously reducing your impact on the environment.  You might think that you won’t make much of a difference, but you will.  You’ll feel the difference in your bottom line, and you’ll get peace of mind knowing that you are doing all you can to help the planet.

These tips are applicable during good times and bad.  If you save a considerable amount now when the economy is in a slump, just think about the difference this reduction in business expenses will make when you expand your business when things get better.  And they will get better.  Remember, this is all part of a cycle.  It’s got to end sooner or later.

If you can, work from home and have your staff work from home too.  Telecommuting is not only one of the most effective ways to reduce business expenses; it is also one of the best ways to cut carbon dioxide emissions.  Go green and save money.  Telecommuting is also viewed by employees as a perk.  Working from home improves productivity and job satisfaction.  It also contributes to the reduction in business expenses by decreasing the amount of sick leave, stress, parking costs, and rental expenses.  Plus if you set up a home office, it is tax deductible.  It’s hard to go wrong with this option.

Another way to reduce business expenses is to cut back on travelling.  Airfare, hotels, transportation, food…it all adds up.  The environment feels the effect, and your bottom line feels the strain too.  With all the advancements in technology and the ease of accessibility of the internet even in the remotest of places, it really is possible to hold meetings online via webcam or teleconference.  Not travelling is a triple win:  you win by reducing business expenses, the environment wins from not having the CO2 emissions, and the employee wins by not losing work and family time to travel (not to mention the added stress of sitting at the airport when the flight is delayed or cancelled).

Reduce, reuse, recycle and repair.  We normally don’t think of these 4 words when it comes to technology or office products.  But why not?  You could seriously reduce your business expenses by buying used furniture.  Since a lot of businesses have closed their doors, there is a lot of barely used office furniture available.  Google “used office furniture” and you’ll come up with over 45 million results. 

Don’t print unless you have to.  Do as much as you can on screen and online.  It may not be much of a reduction in business expense when you look at it in the short run, but when you look at the savings over a year’s time, the difference to your bottom line might be significant. 

If you do direct mail promotions, make sure your list is absolutely, positively scrubbed clean.  Don’t just depend on the list brokers to do this for you.  Do it yourself.  You might spend a little bit of time cleaning it up through phone calls (don’t mail to weak leads) and common sense (repeat names and such), but the payoff will be greater.  Not only will you reduce business expenses by saving money on postage and paper, you also reduce your environmental imprint.  The best part of it all is because your list is scrubbed and targeted to prospects likely to buy; your promotion will also be more successful. 

So there it is, folks.  A few useful tips on how to reduce business expenses, decrease your environmental impact, and increase your cash flow to improve your bottom line.  Until next time…

It’s getting harder and harder for small businesses to cut costs.  Prices of goods keep rising but your customers expect the same quality and value they have always received.  That’s why they keep coming back - at least for now. 

You need to pay your bills, feed your family and live your life.  You depend on your business revenue for all this.  I’m sure you have already looked into how you can cut costs, but maybe you should look a little harder.  There is always a hidden opportunity to reduce your business expenses. 

Let’s get creative and start thinking of ways to cut costs and save money without compromising the quality of your service or product.

1. Cut costs by not wining and dining all your customers - only the top tier ones.  And when you do wine and dine them, limit the wine - that usually takes a big chunk of the bill.  If possible, invite them over for a home-cooked meal instead.
2. Decrease your fixed costs by outsourcing administrative work.  There are a lot of freelancers and college students who are looking for part time employment.  They will work for a lot less money than a full time salaried administrative assistant. 
3. If you haven’t yet, stop buying coffee.  Let each employee provide their own cuppa joe.  Encourage them to bring their own cups, utensils and dishes as well.  You can then cut costs by not having to buy disposable meal ware.  Explain to your employees that times are tough, that this is a temporary event, and by cutting costs on these small amenities, you are able to move that money into paying their salaries.  They’ll understand.  Besides, it’s more eco-friendly.
4. Look for ways to market your business for little or no cost.  That way you can cut costs by reducing your marketing budget, but you’re not marketing less - you’re just marketing creatively.
5. Another way to reduce your business expenses is to cut back on paper use.  Use electronic media as much as possible.  Fill out forms online, print on both sides of the paper, use those messed-up pieces of paper from the printer as scratch paper, etc.  The possibilities are limited only by your imagination.
6. Cut back on variable costs like your electric bill by getting a free energy audit from the electric company.  They’ll let you know about available energy rebates you could take advantage of, and show you other great tips on how to cut costs further.
7. This might take a little bit of research, but the reduction in business expense might just be worth your while.  Raise your insurance deductible.  You might end up paying more per visit, but the overall cost cut and resulting savings may be less than what you would normally pay on your premium.

That should get your creative juices flowing about how to cut costs without compromising the quality and value of your product or service.  Let me know if you’ve tried any of the above and how the cost cutting method worked for you and your business.