While the recession might have ended in June 2009, for many small businesses the daily struggle continues. As a small business owner myself (with my spouse), I can tell you that a little bit of due diligence can save thousands of dollars over the course of a year.
In part to ensure our very survival, we pulled a list of expenses from a year ago and on a year-to-date basis. We took a hard look at the bills we paid on a regular basis and how the billing rates were determined. Like many businesses over the past two or three years, we have reduced staff to something less than 50% of peak staffing levels. From downsizing, we found that many of our daily operational needs had changed and a few hours spent reviewing our expenses and office resources allowed us to save a sizeable amount in monthly fixed charges and we were able to recoup a little bit of money for used equipment.
Phones We first contacted our local phone carrier who also manages our business phone system with its multiple incoming lines. Re-sizing the business volume for the carrier re-set the rates lower by about $30 per month. Second, over a year ago, we switched to Skype for most outgoing long-distance calls. Many consider Skype for its video features, but for pennies per minute, Skype is a great carrier for long distance calling and can record messages. Finally, we re-examined the phone equipment itself. We were able to re-sell on eBay the outdated multi-line system and downsize the physical phone sets recouping a small amount (about $50) for the used equipment.
Rent The business’ landlord is located next door and purchased the office building largely to manage its neighbors and to own a site for potential expansion. The landlord is not actively seeking tenants for already vacant space in the building, and there are other vacant office suites nearby. We approached the landlord for a rent reduction and were granted a small reduction (about $55 per month) in the monthly rent. We continue to look for other, cheaper space, and it remains likely we will locate something soon given open locations nearby.
Computer Equipment Having downsized the business over the past several years due, we found ourselves with a number of CPUs and terminals that were no longer needed. We posted the equipment on Craigslist and found a few buyers. We have also located a child care center and other community organizations who will accept the equipment as a donation. The equipment has been hard to sell because it is so outdated. Make sure to clear the equipment of all files and operating systems before you sell it. If unfamiliar with how to do this, there are numerous sources of information on the Internet. You can also ensure that you do not release information inadvertently through local computer consultants or computer equipment firms.
Office Furniture Through downsizing the organization and as the business has increasingly moved from paper to electronic storage, we found ourselves with extra desks, chairs, and file cabinets. After swapping out the most worn of the pieces from our occupied office cubicles, we were able to sell the used furniture for a few hundred dollars on Craigslist. There is also a local used furniture vendor that will take the best of the pieces for consignment. We pocketed about $400 in the first and second quarter of this year selling furniture.
Paper Shredding The local paper shredding company was willing to cut the regular pick-up schedule from weekly to monthly, reducing the fees by about two-thirds. It does put the responsibility on those in the office to monitor the bins. The company was also willing to make unscheduled pick-ups on an “as needed” basis.
Copying Equipment Technology continues to improve making the old copier nearly obsolete. Many businesses contract the lease and maintenance of the equipment and our business was no different. We found, however, that the multi-task copier/printer/scanner was an economic choice given the reduction in the need to produce paper documents. After all, most of the business we do is via electronic mail. We terminated the copier lease in favor of the newly purchased equipment and expect to breakeven within the year and recoup monthly savings before year-end.
Office Supplies One of the most expensive items in computer documents is the ink cartridge. Regardless of how you dispose of or recycle the ink cartridges, the expense of new cartridges can be quite high. We found re-sellers and Internet stores on eBay that offer competitive prices and have moved almost exclusively to sourcing our printer ink from the Internet. The savings can be 25% or more, depending on the ink requirements.
Fixed costs are a drag on many small businesses that turn profits largely on volume. With the recession and the overall drop in demand, businesses like ours continue to look for ways to cut overhead costs. Through targeting several so-called fixed expenses and by disposing of furniture and equipment, we have seen our overhead costs drop by several hundred dollars per month and we are on track to show profits about twice that of a year ago.