It is relatively simple to cut overhead costs and turn these savings into profits, but some business owners do not take the time to reduce operating costs. You could be overlooking some easy ways to cut costs and increase your profits. Take this quiz to discover how you fare as a frugal entrepreneur.
Answer "yes" or "no" for each of the following five questions. Give yourself two points for every yes answer, and zero points for every no. An evaluation of your score follows the quiz.
1. Do you comparison shop for everything?
2. Do you negotiate discounts with vendors?
3. Do you solicit ideas from your employees about how to cut costs?
4. Did you shop for the best long-distance rates?
5. Do you save on shipping costs by using fax or e-mail whenever possible?
0-3: Tighten your belt. If you tighten spending a little bit, you'll save a lot. Long-distance service and shipping costs may seem like small details in the scheme of your whole business, but they can rack up a lot of savings. Calculate how much you could save in a year by being just a little more frugal. The savings you will achieve will convince you to continue to search for more ways to save in operating costs.
4-6: Use caution. You have the right mindset for savings, but you could do even more. Reevaluate your current long-distance service and avoid expensive shipping costs. Don't overlook the small things. You do a good job of saving on the big picture by comparison shopping and negotiating. But you may overlook a lot of little things that can generate big savings.
7-10: Right on! You are a frugal businessperson, and it shows in the bottom line. You know the value of comparison shopping and negotiating. You recognize that small savings add up, and you aim to save wherever possible. Take advantage of the Internet to make comparison shopping and ordering even easier.
Copyright 1999 Service Corps of Retired Executives (SCORE). All rights reserved.