I think it’s safe to say that if you’re a small business owner, the last few months have been challenging, especially when it comes to cash flow.

With the costs of postage, paper, fuel, utilities and office space all on the rise (though fuel has come down for now), many small business owners have now found themselves having to choose between having a profitable quarter or being able to maintain payroll.

When you mix the aforementioned price increases with the widely reported credit crunch, its understandable why many small business owners have went from nervous-mode to panic-mode.

While these problems aren’t isolated to any one industry or business size, I don’t think that anyone would refute the argument that small businesses are being hurt the most.

However, one of the many advantages small businesses have over large corporations is that they are much more nimble, and can move faster in tough economic times.

Unfortunately, I think that there are many small business owners who neglect to realize that point, and often are found stressing over problems that can easily be solved by making a few adjustments while still keeping their staff in tact.

After some conversations with friends who own businesses ranging in size from 1 to 80 employees, I came up with a list of 8 ways small business owners can cut costs without having to reduce the size of their staff. This list is in no particular order, and for the most part, each of these can be applied to small businesses of all sizes.

8 ways small business owners can cut costs without having to fire employees:

#1 – Go green! I know that this is something that gets overused these days, however it doesn’t take a rocket scientist to understand that using less electricity translates into reduced energy costs at the end of each month. I’m not saying that you have to move to using only recycled products, but incorporating energy efficient technology into your office will result in noticeable annual savings.

#2 – Don’t use snail mail if you don’t have to!
This has been one thing that has especially bothered me over the last couple of years, simply because it seems that the cost of postage is continually changing. If you do a lot of mailing for your business, even a 1 cent rise in postage can completely throw off an annual budget, depending on your revenues. Instead of doing things the old-fashioned way (snail-mail), evaluate which items can be emailed to clients and prospects. Not only will be you be saving money on postage, but you’ll also be using less paper, ink and envelopes.

#3 – Barter!
Unfortunately bartering is a concept that many Americans aren’t used to, simply because it isn’t a huge part of our culture. In the world of small businesses, the amount of money one company can save simply by trading services for other services can be quite significant.

#4 - Buy in bulk! This one is simple, if you’re a small business owner and don’t have a membership at Sam’s Club, Costco, or some other wholesale vendor, get one! It’s not uncommon to see savings upwards of 30% when buying in bulk. When thinking of bulk purchases, don’t just limit it common things like printer paper, ink, etc, but expand that to other things used in your office, like coffee, sugar, water, etc.

#5 – Send your employees home!
If you have employees that you can trust, and could do their job just as well (if not better) from their house, let them go home. If you see that a significant portion of your employees can work effectively from home, this might be a good opportunity to downsize to a smaller, more affordable office space that offers shared workstations for when employees do come in.

#6 – Improve your website! Even if you’re company isn’t in a financial bind, this is something that I urge every small business owner to consider. How do you know if you need to improve your website? It’s simple: if you haven’t updated it in the last 6 months, your site is in need of improvement. While you might not need a redesign, having fresh and timely content can be an easy way to bring in new customers (or prospects), while also building your company’s brand and visibility.

#7 – Become familiar with your VoIP options! Voice-over-Internet-Protocol (VoIP) is a good friend to many small business owners, simply because it offers flexibility and affordability that traditional phone services cannotr. Just on long-distance calling, savings of 30 – 40% are not uncommon for small businesses that use VoIP.

#8 – Partner with other similar businesses! It might seem counterintuitive to join forces with your competitors, but what about teaming up with another business that performs similar services in a different sector? This is something that can easily be done without having to merge companies and deal with all the legalities. If you are able to find a business interested in this, not only will you have the potential of sharing office expenses, but the prospects of sharing staff might also become a possibility. I’ve seen a few businesses do this with accountants and have saved over $40,000 per year in salary and benefits. But remember: only go into partnerships with those you trust!

By no means is this list exhaustive. If you know of other things that small business owners can do to reduce costs, I urge you to leave your thoughts in the comments section below.

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