30 Great Ideas for Doomsday (or Any Day) Budgeting
April 1, 2009
30 Great Ideas for Doomsday (or Any Day) Budgeting
If your business is on the edge of disaster and you need to count every penny in order to survive (or you just want to run leaner and meaner so you can optimize profits), here are 30 ways to slash your expenses, conserve your cash, and weather this economic tsunami.
1. Eliminate all raises and bonuses. While staff may have come to expect these annual payments, they prefer to have job security—something that can only be assured if you stay in business.
2. Eliminate 401(k) and other retirement plan contributions.
3. Reduce medical coverage. Shift more of the cost to employees or change the type of coverage you provide. To learn more about health savings accounts, a low-cost medical coverage option, visit SBA.
4. Cut back on other perks. Providing lunches, tickets to sports events, cab rides home, and other little benefits that employees have grown to love and expect may be too costly now. Get creative to show staff your appreciation—a personal thank you can go a long way these days.
5. Optimize employee productivity. Get more from your staff. Engage your employees in the conversation about to do this; they may know ways to do things better, faster, and cheaper.
6. Use tax breaks. If you need to hire someone, consider choosing an employee that qualifies you for a tax credit. Review eligibility for the work opportunity tax credit before making a hiring decision.
7. Use contractors and freelancers. If you have a special project or need help but don't want to commit to an employment relationship in these uncertain economic times, engage independent contractors or freelancers. Find qualified freelancers through Guru (a database of 100,000 people).
8. Renegotiate rent. Your landlord wants to keep space filled, something that may be difficult to do in some locations today. Open talks with your landlord, especially if your lease is coming up for renewal.
9. Sublet space. If your lease agreement allows you to sublet, consolidate your operations and reduce your net rent by leasing unused space to other businesses.
10. Conserve electricity. Turn off unused office equipment after hours and on weekends and holidays. The difference between keeping just one PC on all the time versus turning if off on nights and weekends can save you over $100 for the year. Check for savings at Iowa State University.
11. Conserve on heating and cooling costs. Thermostat adjustments in winter and summer can produce sizable savings. Save on summer air conditioning costs by pre-cooling your space. Researchers have found that setting the thermostat to cooler-than-normal temperatures early in the day and to warmer-than-normal in the afternoon keeps the space cooler all day long than a static thermostat and can cut energy usage by 25% to 30% during peak electrical demand.
12. Increase insurance deductibles. Don't eliminate necessary insurance coverage, but reduce your premiums by increasing deductibles. This leaves insurance to pay for only catastrophic events. Talk with your insurance agent.
13. Opt for better phone plans. Consider using Vonage and other VoIP solutions to reduce monthly phone costs. Select cell phone plans wisely. For example, ATT's BusinessTalk allows companies to share up to 20,000 "Anytime Minutes" each month among up to 40 employees.
14. Barter for the goods and services you need. Instead of spending cash to acquire products and services, exchange what you sell for the things you need. Join a barter exchange geared to business, such as Itex or International Monetary Systems. While these exchanges are taxable (and subject to sales tax where applicable), they let you save your cash for other things.
15. Sell unused vehicles and equipment. For example, dispose of old iPods, iPhones, PDAs, laptops, and certain other electronic devices in an environmentally sensitive way and get paid using BuyMyTronics.com (payment depends on model and condition and is made via PayPal or a check mailed to you within 48 hours of receiving your item). Other resources: CashOldPhone.com and Ibuyphones.com.
16. Terminate expensive car leases. While leases are contracts that cannot easily be undone, you may be able to sell yours and get out from under it. Try LeaseTrader.com and Swapalease.com (there are advertising fees and seller transaction fees).
17. Repair instead of replace. Make your current equipment last longer by keeping it in good repair. Following manufacturer guidelines on maintenance can help.
18. Buy used equipment. If you need something you don't already have, consider "pre-owned" equipment. Find it through Used Equipment Network.
19. Make smarter business travel plans. Decide whether it's cheaper to fly or drive by using an online calculator (savings mount from driving when two or more people travel together).
20. Reduce marketing costs. You need to maintain (or even increase) your marketing efforts during tough times. If you need images for business cards, brochures, post cards, catalogs, Web sites, or other materials, access over 3 million stock photos at a low price through Avery Dennison Office Products. Get 20 free images out of 60 (no purchase necessary) plus a 20% discount on purchases of 50 credits or more. (If you download images from the Web without permission, you risk legal exposure for copyright violations.) Combine these iStockphoto images with free templates from Avery Dennison to create your own inexpensive marketing materials.
21. Slash postage and shipping costs. Eliminate first-class letters, replacing them with email (the cost of a first-class letter is going up to 44¢ on May 11). For example, if you've been sending invoices by snail mail, use email (added benefit of being received instantaneously and getting paid faster). Use U.S. Postal Service Carrier pickup to save both time and money (the service is free).
22. Get rebates of erroneous shipping costs. If packages shipped by FedEx or UPS arrive late (an estimated 10% do), third parties use your account without permission, or the shipper erroneously charges you for items you didn't send, you're overpaying. Obtain a refund by using a company that audits your shipping charges (they keep 50% of whatever they recover on your behalf). Resources: Refund-Retriever and Refund Technology.
23. Get cash back on credit card purchases. If you can pay off your credit card balances each month, then use a card that will provide you with benefits. Choose the appropriate card using LowCards.
24. Avoid penalties and interest charges. Watch tax filings and other government reporting carefully to avoid unnecessary charges.
25. Cancel magazine subscriptions. AllTop is an online magazine rack. Use Mygazines, another free online service, to read (now or later) selected articles in BusinessWeek, Forbes, Inc., Money, The Economist, and many other magazines.
26. Be listed in a free seller directory. At EveryPlaceISell you can list your business information (you must re-register every 90 days to remain in the directory). MerchantCircle has free marketing tools and resources (such as a free listing in its local merchant network) to help local small businesses reach customers.
27. Use free business applications. Microsoft's Office Live Small Business lets you set up a Web site for free and also use free online tools for managing a business, such as contact manager, document manager, and project manager.
28. Use free accounting/bookkeeping solutions. Intuit's QuickBooks Simple Start is downloadable software that lets you track income and expenses, create invoices online and more. Outright (formerly GoBootstrap.com) is a secure online service that helps you track sales, organize information for tax filing, and reminds you to pay estimated taxes, and is free during the Beta period.
29. Read free how-to guides. Work.com has nearly 3,000 online guides on e-commerce, legal contracts, sales and marketing, business plans, or other subjects. WikiHOW offers more than 50,000 articles.
30. Get free business advice. Try free counseling from a Small Business Development Center (there is a network of 63 lead Small Business Development Centers and more than 1,100 service centers nationwide). Find one near you through the SBCD locator. Also try SCORE, counselors to America's small business.