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Some Simple Ways To Save Costs During A Recession

Aug 24, 2008
Below you will find five ways to make a positive change in your business to help you make it through tough economic times:

1) Invest in Employees - The best resource your company has is its employees. When the economy takes a down turn, your business will feel it, and the individuals feel the impacts as well. When a company loses top employees, disaster can strike - in the form of lost profits, training time, possibly even a migration of skills over to a competitor. Your employees are best kept with performance-based incentives such as profit sharing or bonuses. In short, if you can provide the incentive for your staff to perform better, your business can benefit through their efforts also.

2) Go Green - Although going green may seem like just a fad, it can also help your business save money. For example, a recent study indicated that five percent of electrical power consumed in the US was a waste, used only by electronics standing by - about $4 billion total annually. By just being conscious of electrical use and attempting to conserve, large amounts of money can be saved. Additionally, virtualization can help a business consolidate a series of servers into one better, more efficient server. This helps save energy use, space and maintenance costs. In addition, a business environment which is conscious of its resource use has a tendency to attract quality, conscientious people.

3) Alternative Commuting - Take a look at new ways to get to work by collaborating with clients and colleagues. The savings in travel expenses can be huge. Also consider tools like Webex and Gotomeeting.com for online collaboration. Videoconferencing can also provide useful and valuable alternatives to face-to-face meetings. A telecommute saves not just the time of commuting, but also tends to leave staff members happier and more relaxed. Instead of providing employees with a parking place, consider giving them a transportation budget. These expenses are taxable to the company, and this reduces the company carbon footprint, improving health and productivity through more exercise and decreased stress.

4) Core Business - Robert Slee, President of Roberston & Foley investment banking firm: "Outsource what you can in order to focus on the important things." By focusing on your best competencies while resisting the urge to do too much, you can avoid wasting time and money which can possibly damage core business and your reputation. Outsourcing is often inexpensive compared to hiring internal staff, also offering resources that are not normally available to an individual small business.

5) Preserve Cash Flow - A company's cash flow is the heart of the business, and the importance of staying liquid is known by Fortune 500 companies. Be sure to take step to increase cash reserves. Be sure your accounts receivable stay a priority and are paid on time. Meanwhile, pay your accounts as slowly as possible without creating a negative impact in the relationship. Don't sink cash into surplus inventory or by paying extra for on-time delivery services. Postpone large capital expenses and use good lease and financing options.
About the Author
Nick Pegley is VP Marketing for All Covered: Technology Services Partner for Small Business, providing technology solutions and services in 20 major U.S. metro areas.
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