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By Diane Hughes
One of the primary concerns all small businesses have is
saving money. When it's time to trim the fat, most look for
one giant expense to decrease or eliminate in order to stay
within budget. More often than not, it doesn't work that
way.
Most budgeting experts will tell you that re-evaluating
your overall expenses and cutting each by just a bit will
actually gain you more ground than doing without something
major that you really need. Here are a few ideas of areas
to look at and costs to reduce that can have a major impact
on your overall profits.
1) Internet Access - Every online business owner must have
access to the Web. But consider this. The market is so
flooded with ISPs that you have a lot of room to dicker.
Start by searching the Internet under keywords like "cheap
internet access" or "discount isp" to bring up lists of
possibilities. Then, do one of two things.
(a) Try some of these independent ISPs. Smaller companies
can have high quality service and support just like the
"big boys". One business owner I know recently switched
from Prodigy ($21.95/mth) to a smaller ISP that only
charges $12.50/mth with no contracts. She actually liked
the new provider better and it costs her about half as
much. [Savings of $113.40 per year.]
(b) Renegotiate with your existing ISP. Most larger ISPs
know you have a choice of a thousand other companies.
Because of this, they are normally more than willing to
renegotiate your costs. Be honest. Tell them you are a
small business owner and you need to cut expenses. Explain
that you've been pleased with their service but will be
forced to go with someone else if some sort of arrangement
isn't worked out. Another friend of mine did this and
received 6 months free! Most will offer 2-3 months free
and/or a discount with an annual agreement. NOTE: When you
approach your ISP, be fully prepared to switch to someone
else if your offer is rejected. [Savings of $105.80 per
year with 3 months free and reduced, annual rate.]
2) Switch From A Merchant Account To A Payment Service - If
you have a low volume of credit card transactions, it might
benefit you to switch from a merchant account to some sort
of payment service like Pay Pal or ClickBank. Statement
fees, monthly fees, discount percentages and the like can
all add up to big money.
While payment services normally have reduced fees, they do
have higher "per transaction" costs so you'll have to do
some math to find out if this is a good idea for your
business. Just take an "average" invoice amount from a sale
and multiply it times 12 to get a base total to work with.
Now, add in your 12 months worth of fees for statement,
monthly access, discount percentage, per transaction cost,
etc. This is your "example" total. Do the same with several
payment services using their costs to see which one, over
time, would be less expensive for you.
If you were paying a $15 statement fee, $20 monthly fee, 3%
+ $.35 per transaction and $25 monthly gateway fee, your
annual expenses would be $742.20 for an average transaction
of $50.00. Your annual fees for a payment service with
3.5%, $1.00 per transaction and a one-time $50.00 set up
charge would only be $83.00 per year. [Savings of $659.20
per year.]
3) Re-evaluate Your Long Distance Costs - Competition is
the small business owner's friend! With hundreds of long
distance companies out there, you can drastically reduce
your charges instantly. Again - use the 'Net to search for
inexpensive long distance service. A business owner I know
changed from a MCI "program" to one of those 10-10
companies and reduced her per minute charge from $ .07 to $
.05. Depending on the volume of calls you make, some
programs offer rates as low as $ .03 per minute. [Estimated
savings of $20-$30 per year for 1,000 minutes.]
From just these three little things, we've saved an
estimated $802.60 per year. That's enough to make anyone's
spreadsheet sing! Go through your list of costs and you
will most likely find other expenses that can easily be
reduced with a bit of research and a phone call or two.
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