There's thrifty and there's cheap. Which one are you?
When profits diminish by a little bit, you get concerned. When the economy rumbles and your entire market segment stops buying, you panic. Panic is not your friend.
If you eliminate what you need in order to operate your business and produce what you sell, you won't be able to keep up when customers do start buying again. A smart savings approach is the answer. Get your heart rate back down to normal, then peruse the save/spend list below.
Save on traditional advertising
Print publications, radio ads, and television ads are no longer the only, or even the best, ways to advertise. You know this already. Take the leap of faith that those statistics about millions of people doing their research and shopping online are accurate. Then cancel your Yellow Pages ad, your newspaper ad, and all other advertising in traditional media sources. At the very least, cut that budget by 50 percent.
Spend on online advertising and new media
Build up your business website. Pay for some SEO consulting. Set a monthly budget for online advertising, which can cost much, much less than traditional advertising.
Save on marketing/PR firms
Since most of your advertising can be done via social networking, switch your whole marketing and public relations strategy to online venues. If you're not sure about how to do this, then hire a consultant for a specific task. For example, hire someone to help you set up an appropriate online profile and a social media strategy. Don't spend money on open-ended objectives like "get us more publicity."
Spend on a freelancer or employee for marketing work
Pay an employee or outsource to a freelancer to do the actual work of marketing your business online. This work could include ongoing SEO research, creating content for your website and blog, keeping up with social networking, writing press releases, and finding (free) opportunities for publicity online.
Save on extraneous employee perks
Perks are great. Who doesn't like a free lunch, or free bagels on Friday mornings, or a gym membership? But these perks, small as they are, add up quickly. Given the choice, your employees would probably choose job security and continued wages over a couple of small perks.
Spend on important employee benefits
Health insurance tops the list. Allowing employees to have flexible hours or telecommuting options is also an important benefit that can improve employee productivity and give them more control of their lifestyle. It can also save you money on overhead costs (less office use).
And while "wages" aren't exactly a benefit, keeping employee salaries at a livable level allows you to keep the good employees who will help your business survive.
Save on travel expenses
First question: Does anyone actually need to travel to X event or Y client meeting or to make Z presentation? With all the options to connect via the Internet, travel itself might be extraneous. Don't go or send your employee unless it's necessary. You'll save money for your business and time for everyone involved.
Second question: If the travel is necessary, skip the expensive upgrades. Get there, get the job done, get home. You can accomplish these things without traveling business class, hiring a limo service, or staying in a suite.
Spend on professional accounting services
Business taxes can get complicated, and small business owners who don't specialize in tax law can spend a lot of time trying to figure it all out—and still end up paying more than they had to on taxes. Spend some money on a professional CPA to do this work for you and you can save even more than you spend.
Remember, cheap doesn't mean smart. Cheap means cheap. Smart means making good decisions, spending where you need to and saving where you can without sacrificing the quality of your business.
Annie Mueller is a freelance writer based in St. Louis. She covers small business topics with a focus on lean/zero budget startups, business blogging, and simple (sane) ways business can use social media without selling their souls to Facebook. Her work can be seen online at Investopedia's Financial Edge blog, Young Entrepreneur, Wise Bread, Organic Authority, Modern Mom, and her own site, AnnieMueller.com. Find her on Twitter: @AnnieMueller.