Looking to grow your business in 2011? One of the best ways to liberate cash for business development is to take a scalpel to recurring expenses that you may have overlooked in earlier rounds of cost cutting.
By ferreting out the products or services in your monthly budget that you no longer need -- perhaps because better, less expensive technology has replaced them -- you’ll see exponential savings. Here are some ideas worth considering:
1. Phone Service
You can reap huge savings if you are willing to do some homework on the options available to you. Ask Joe Adkins. “As soon as the recession hit, we had to look at our books and cut corners,” says the Orlando, Florida. entrepreneur, who runs two companies: Global Asset Management Group, a wealth management firm that has 20 employees, and The Realty Factor, a full-service real estate company with about 60 agents. Adkins quickly realized that he could save a bundle by tackling his monthly phone charges. At that point three years ago, he was paying more than $1,800 a month for a T1 line, a phone system, and phone equipment lease. He reduced his monthly phone bills to about $100 a month. How? He now uses a phone server called Asterisk, FreePBX as the software to set up extensions and conference lines, and VoIP Innovations, a wholesaler that aggregates minutes on top telecommunications carriers and provides them to its customers. “It’s saved us over $60,000 the past three years, which is money that has gone into the company’s pocket,” he says.
2. Fax Line
You’ll save on both phone charges and cartridges. Motivational speaker Dave Sheffield was spending $40 a month to keep a separate fax line for his business. “I found a service that allows me to send faxes, have a local number, and receive faxes that are forwarded to my e-mail inbox, all for $30 per year,” he said in an e-mail. He uses MaxEmail, but that’s far from the only choice available. For other options, check out blogger Tom Walker’s post on the 10 Best Free Online Fax Services. Not only will you save money, but you’ll keep the fax cartridges out of the waste stream.
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3. Website Hosting
If you have great IT talent on your team, this option is worth considering. Before he began his cost cutting, Adkins was paying $300 a month for website hosting. He estimates that he has saved $10,800 in 36 months by having his companies start hosting their own sites. He made an initial investment of $400 for each of his four servers and $200 for high-quality battery backups. However, Adkins, who has a computer programming background, says there are now no ongoing costs.
4. The Office Printer
Adkins eliminated the main office printer -- despite a lot of resistance from his team -- and estimates he saves $10,000 a year on equipment leasing and paper costs. “Some people were printing thousands of pages of e-mails and… junk,” he says. To help his staff go paperless, he invested in six $400 scanners and taught everyone how to use Adobe PDF files in lieu of paper documents. For paperwork that must be printed, some employees have small printers at their desks, he says.
5. Last-Minute "Emergency" Costs
Rivka Caroline, a consultant out of Miami who advises small companies on time management, says some of her clients regularly spring for costly overnight mail and overtime because they work in crisis mode constantly. Many companies can reduce 11th hour work if the CEO commits to making critical decisions earlier and makes sure that every employee has a written list of the major tasks he or she needs to complete the next day -- before leaving the office in the evening, Caroline advises. “When you can shift from panic mode to proactive mode, you have more options,” she says. And your bills for overnight mail -- and paying people to stay until midnight -- are likely to be a lot smaller.
Elaine Pofeldt is an independent journalist specializing in entrepreneurship whose work has appeared in TheAtlantic.com, BNET, Crain’s New York Business, CBS Moneywatch, Good Housekeeping, Inc., Working Mother and many other publications. A former senior editor of Fortune Small Business magazine and editor of its website, she does editorial consulting for online and print publications.