In these economic times it is important for a business to leverage every dollar, especially small businesses and home businesses. The first thing that happens in an economic downturn is that purchases get put off. However, this can only go so far before it begins to affect the business.
For example if you’re a taxi driver, putting off repairs may result in a vehicle that potential passengers may avoid. If you’re in a bakery business putting off repairs to the oven, or even purchase of a new oven may result in poor quality, spoiled batches and lost clients.
Here are four ways for a small business owner to cut expenses without having to sacrifice their business:
1. 1. Bartering. Offer your product or services in exchange for what you need. If you can’t barter the whole amount, barter as much as you can. If you’re uncomfortable doing it directly, then try joining a barter club. There are several established ones available.
2. 2. Group buying. Join with other businesses that want to make the same purchase and negotiate a bulk purchase price. Some retailers will give as much as a 60 per cent discount on some products.
3. 3. Buy used. Visit auctions for bankrupt businesses or simply call up other small businesses that you think may have some spares. You can even see who’s buying what you need at the nearby office depot and ask if they have an old product and what they plan to do with it.
4. 4. Sharing. This is something that farmers continue to do today. If you need a piece of equipment that is expensive, but only need it for part of the time then find another business who is in the same situation and split the cost. In Europe these types of informal co-operative arrangements can include as many as a dozen businesses. It is ideal for say, small wineries or olive growers who need to process their harvest and it only takes a day or two.
These four methods are the quickest way to save the most money. The lower your expenses the more money you’ll make and the more price competitive you can afford to be. These are the times to think smarter and to fully leverage all of your assets, including your money.
By focusing on the bottom line through expense reduction you will be in a better position to increase your revenue line. This is especially the case if you can reduce your price to that of the competition as a result of having lower operating expenses. That is how businesses attract more sales in tough times.
Once you start to think along the lines of maximizing the use of what you have your business will be much stronger for it. Your business will be able to better to survive and perhaps even grow while others are closing down.