BIG Savings Tips for Small Businesses

I have been on a big cost cutting kick lately... maybe something in the summer air?

The old adage is true - "A dollar saved is a dollar earned", but it is even better than that...

Saving a dollar drops right to the profit bottom line. It is FAR easier to execute on cutting some non-performing costs than it is to think of ways to create more revenue, subtract the acquisition and operating costs to produce the same net dollar in profit.

I operate several companies, advise and sit on the board of a few others and have been trumpeting this theme big time lately. Poking through the expense lines of the P&L I have identified many expenses that could be greatly reduced or eliminated all together. The increase in net income has bumped up anywhere from 10% up to 23% in one case.

A 23% increase in profit is a HUGE victory! Lots of capital, internal resources, time and distraction from other productive endeavors would have had to go into producing that kind of return otherwise. Think about it!

Here is a good article that runs through a list of cost savings tips: Getting to Black: 100 Tips to Cut Small Business Overhead and Reach Profitability

In addition to the list provided in the article, be sure to analyze your marketing expenses. I have found a tremendous amount of waste in marketing campaigns that are not delivering quantitative and quality results.

The best way to improve your ROI (Return On Investment) in your sales and marketing is to cut off spending on low or non-performing initiatives. This not only saves you money, increases your profitability but also saves you time and resources that would have been spent otherwise in nurturing poor quality leads. That time and those resources can now be re-allocated to profitable initiatives.

The net result? You save money, increase profitability and make MORE money with the new found time and resources once spent on low or non-performing initiatives. The net result can be as much as 50%+ in net improvements to the bottom line.

THAT'S how to beat your competition and impress your banker!

Know an entrepreneur or small business owner? Be a good Samaritan and pass along this article:  http://darrenhardy.typepad.com/blog/2007/06/big_savings_tip.html

Comments

[Michelle Hoffmann]

Great article... I've been doing alot of cutting back and rethinking my success strategies lately.

Thanks for the insight!

Michelle