Practical Measures to Curtail Business Expenditure

Business houses survive only when they can match their costs with its competitors or lower its costs than them. If a proper plan and strategy for lowering business expenditure could be implemented goods or services could be produced at a much cheaper rate than its competitors thereby leading to achieve economies of scale. Higher rate of production of goods and services are possible and higher profit margin would lead to higher gross revenue.

If you are a manufacturer or a provider of services the first terms of negotiation while purchasing from other businesses would be to induce them to provide the raw materials in exchange for your goods and services. In this way a lot of money on purchase could be saved.

Marketing expenditures on advertising, branding and promotional activities could be curtailed by implementing business networking strategy. Mailing lists or leads generated through such networking with other businesses could be a target customer base. Also the networking could be utilised for exchanging goods and services thereby reducing costs.

Purchasing in bulk would lead to a savings in inventory costs. To implement this, proper inventory planning is required and the fast moving items could be purchased in bulk from a mail order supplier or from a wholesale warehouse in which the firm is a member.

Depending on the nature of your business you could search for websites where a lot of free materials are available. Online services for business, graphics and backgrounds and software are available for free on such sites which could save a lot for your business expenditures on such items.

For short term needs of the business, equipments could be borrowed and utilised rather than making a one time purchase which involves a substantial investment.

Before purchasing for business the auction houses and websites could be given a consideration. If the bidding matches and it is lower than the actual purchasing cost then there could be a great cutback on the purchasing expenditure.

Planning for the purchase requirements of your business could be made in advance. The stores which have large quantities of your required materials should be traced out and when the sale starts instant buying could be made availing discounts.

Even, depending on the nature of your business and the necessary requirements second hand purchases could be made from yard or garage sales. It could also be sourced from stores dealing in second hand goods, newsgroups and, message boards etc. This could reduce the expenditure on capital goods substantially.

While purchasing you should try for the lowest rates possible. Skillful bargaining curtails the cost of goods in a significant way. For this as many sources of supply as available for the materials could be tried.

New suppliers should be encouraged as they provide lower rates compared to others. Depending on a few suppliers could lead to a higher quotation.

These suggestions are not comprehensive but are inclusive. New strategies could be formed and implemented thereby leading your business to outshine its competitors.

Small Business – Internet Presence is a Must

It seems like every day another large business announces more layoffs, plant closings, reorganization, or all of the above. Lost somewhere in the headlines are the hardships small business owners are facing. Businesses are seeing a dramatic drop in sales and have to lower profit margins to stay competitive. Most large businesses have the resources and revenue to withstand the current economy, whereas many small businesses have been forced to shut down.

In the current economic conditions, it has never been more important for small businesses to have a presence on the internet. Whether you join an advertising network, create a website, or promote your product(s) on social media sites; an internet presence is a must. When your local and regional sales are down, your internet revenue can keep keep your business alive.

As everyone knows, advertising can be very expensive depending on what your trying to sell. Social media sites, blogs, and forums can be an effective and inexpensive way to get what your offering in front of a lot of people. However, it’s a very tedious and time consuming task. Realistically, none of those methods can reach their full potential if you don’t have a website for your potential customers to go to and get more information about your business and product(s).

The first step in getting your business online is to get your website up and running. The amount of options you have are staggering. So the question is – Where do you start? The answer to that question depends on you and your product(s). There are 3 basic options for website creation.

1. If you have a large product base and/or do not have a lot of internet knowledge, it’s probably worth investing in a professional website design service. This can give you the exact look and feel you want, but comes at a much greater expense.

2. If you have only a few products and/or have some basic computer knowledge, a quality web hosting company could be a better way to go. They are relatively inexpensive, have very easy to use templates, and have many extras included or available.

3. A pre-designed web store is quite possibly the fastest, easiest, and most economical way to go. These are ready to go, customizable, complete with shopping cart websites you could have up and running in a few hours. If you are just starting out or don’t want to deal with the hassles and expense of the options above, this is probably the best way to go.

How ever you choose to promote your small business on the internet, you must keep a few things in mind.

1. Are you internet literate? Are you willing to learn?

2. How much are you willing to spend to get your small business on the internet?

3. Once you have your business on the internet, what are your goals?

There are already millions upon millions of websites for people to browse. What kind of plan do you have for yours? Getting your small business online is only the first 1% of your journey. The other 99% is finding a way to stand out from the rest.

Is a ‘Bootstrapping’ Mentality Holding Back Your Business?

If you’re like many Internet business owners you’ve had to ‘bootstrap’ your way to business success. You haven’t received loans or venture capital – you’ve used savings, you’ve reinvested your profits, and you’ve rolled up your sleeves and done just about everything yourself – to get your business up and running. But there’s a point at which where a ‘bootstrapping’ mentality can actually inhibit the growth of your business.

This is particularly so when it comes to delegating and outsourcing. While it’s understandable to want to save money by doing as many business tasks as you can yourself, you may be holding your business back by not paying experts to those tasks instead. In fact, even if you are an expert at every single thing in your business, you are still inhibiting the success of your business by not outsourcing.

So why pay another person or company to take care of responsibilities you are very capable of doing yourself? After all, no one knows what needs to be done better than you. Only you know how you want your website to look. Only you know how to write copy that sells. Only you know how to manage your financial records.

Unfortunately, doing everything yourself is not the way to grow a substantial business. And, logically, it’s not the way to grow a business that can function without you – the dream of many Internet business owners.

Why? Because while you may (or may not) be able to do everything in your business, there are only a few high value things that require your unique input. By spreading yourself across so many activities you will always limit the time you spend on the highest value activities… which, in turn, limits the sales and profits your Internet business can generate.

Imagine the alternative – you only spend your time on the high value tasks, and outsource or delegate the rest. Sure, at first, it may seem like you’re spending more money by hiring people, but by spending a little on people doing the lower value activities – while you devote your time to the high value activities – you will allow your business to grow much more quickly.

Long term returns – not short term expenses – are on what’s important here.

But, writing web copy is important. So is doing the books. How do you determine which responsibilities you should assume, and which ones should be delegated to others within your company or outsourced to outside firms or individuals?

The answer is to consider which business activities generate the greatest returns on the investment of your time. Then it’s a matter of coming up with a plan for spending more of your time doing these activities, and spending less – by delegating or outsourcing – everything else.

In fact, once you figure out the return on your time when you spend it on the highest value activities you can calculate precisely how much you can afford to pay someone else to take on the other responsibilities. For example, if you can bring in $200 per hour when you write web copy, while you can pay a bookkeeper $25 per hour to do the accounting… it’s fairly obvious that you should spend more time writing copy and pay someone else to do the books.

Now, sometimes the choice is out of your hands. There are times when, despite recognizing the need to outsource, you just don’t have the cash to pay someone else to do various tasks. In that case, it’s still a good idea to prioritize your time so you spend more time on the high value tasks and less time on the low value tasks. Your business will still grow and eventually you’ll be in a position to pay others to help.

The main thing is that you lose your attachment to doing everything yourself and embrace outsourcing and delegating. Your Internet business will thank you for it… and so will you.