The reality of a recession has prompted many business owners to devise strategies to weather the economic downturn. Stretching business cash, cutting costs, and finding new ways to do more with less are top of mind. Below, Inc.com has assembled bootstrapping tips that you can use to start saving money today.
Start with Inc magazine's timeless cost-cutting advice in the 1990 piece 40 Ways to Cut Your Losses, then take note of Marc Ballon's 10 Tips for Tightwads. Lastly, peruse the categories below for even more money-saving ideas from small-business owners.
10 Tips from Tightwads
Don't offer meal per diems; employees have to eat anyway.
Use secondhand furniture; a new desk isn't going to make a company more profitable.
Buy used machinery for low-tech jobs.
Pay for major purchases within 10 to 15 days for the 2% discount.
Self-insure as much as possible.
Attend fewer conferences and drop out of all trade associations.
Buy directly from manufacturers if possible.
Give employees certificates or small monetary rewards for coming up with great cost-cutting ideas.
Have managers scrutinize operational expenses monthly.
Reducing Overhead Track your overhead. Mike Yantis, the chief financial officer of Yantis Corp., a San Antonio-based construction company, analyzes overhead costs on every project the company bids on to help them figure out where to trim the fat.
Send employees home. To save money on office space, Janet Caswell of Caswell & Associates, an accounting firm, set employees up with home offices.
Eliminate variable expenses. Art Allen, founder of Allen Systems Group, eliminated variable expenses for one month to reduce his company's expenses.
Financing Fund growth with cost-control measures. Using group purchasing discounts, auditing significant operating expenses, and keeping hiring costs low are three penny-pinching pointers to help fund your business's growth.
Borrow from customers. When Van Strom, president of American Design & Manufacturing, needed to buy a $100,000 embroidery machine, he financed it through an unconventional source: one of his company's biggest customers.
Turn to employees. Margaret Johnsson of the Johnsson Group, a financial consulting firm, turned to her employees to when the business needed some fast cash.
Boosting Cash Flow Stretch your cash. Entrepreneurs offer eight strategies for squeezing more out of your business's cash including seeking upfront payments from customers and exercising care in your pricing.
Get employee feedback. When magazine publisher Anchor Communications, projected a 1995 year-end cash shortfall, chief operating officer Danny Warshay enlisted the entire company's help in devising ways to boost cash flow.
Create a budget. By going back to basics, Linda Nespole of Hi-Shear Technology created a cost-control blueprint that quickly boosted the company's bottom line.
Leverage suppliers. Mike Scimeca, founder of Florida CirTech, a supplier of chemicals and metals for the circuit board industry, quizzed suppliers about strategies for cost-effective trucking and did some comparison-shopping among suppliers to cut expenses.
Low-cost Marketing Use free college labor. Ron Vos, founder of Hi Frequency Marketing Inc., recruits unpaid college interns to create buzz for his business.