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Cost Cutting Tips for Small Family Businesses


 
 

If you're trying to boost your bottom line and avoid layoffs, reducing overhead is essential. Many family business owners are overspending on everyday office expenses, often paying as much as tens of thousands of dollars more than they should, says cost management consultant Arleen Kahn, founder and president of New York-based AMK Associates. Kahn offers these cost-cutting tips for small-business owners:

Ship wisely. Because the shipping volume is typically low in small businesses, pick a courier who contracts with an overnight-delivery company. The courier will pick up your package, and the courier's relationship with the shipping company will get you lower rates.

Choose a broker. Similar to couriers, telecommunications brokers contract with major carriers to get clients better rates. When choosing a broker, ask to see proposals from multiple carriers. Brokers are knowledgeable about current technology and can recommend equipment that fits your needs.

Know what you're paying for. All copiers are digital now and come with multiple accessories. When buying, ask the dealer to provide a list of accessories and evaluate your needs. Although all machines have many capabilities, you should pay only for what you need -- which could save you $1,000 to $1,500. And you can always activate accessories later if your needs change.

Avoid service contracts. Many companies pay anywhere from $3,000 to $40,000 per year for service contracts when it might be more efficient to simply pay for time and materials -- even as much as $175 per hour -- if repairs are needed. With the price of equipment continually depreciating, paying for a service contract will cost more in the long run than buying a new machine when the time comes.

Use generics. Many generic office products are manufactured by the same companies as the brand-name varieties.

 

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how to cut operational expenses