According to a recent survey, 34 percent of small business owners cited managing cash flow as their toughest challenge in the current economy, followed by 15 percent who said keeping healthcare and insurance costs in line was the main challenge. TD Bank, which conducted the survey, asked small business owners across the Southeast, Mid-Atlantic and Northeast regions how they believe 2010 will be compared to 2009.
For those business owners who said they have not been adversely affected by the recession, some 29 percent of respondents identified streamlining costs as a huge factor in their success.
And as businesses head toward the end of 2010 and look forward to the coming year, the vast majority, 45 percent, identify their overall goal as saving more and spending less.
Dan Schneider, founder of SIB Development & Consulting, a cost recovery and expense reduction firm in Charleston, offers these tips to help business owners have a more promising year.
* Setting up corporate travel plans with car rental companies hotels and airlines. Even small businesses can earn rewards and get fixed pricing. Also the $20 fee for a travel agent is cheaper then having your employee take his time to look for the best rates on line and maybe not realize hidden charges. An $80,000 per year employee that takes more then five minutes to book flight is a loss.
* Sometimes service contracts have great flat fee unlimited service, but if you look at how much service has been performed during the past three years, you can get an idea of what is better - $10,000 per year service on a machine or $150 per hour to fix it. If you have had only one or two problems per year and the vendor came out for five hours each time, it might be worth the risk to save the money and pay when the equipment breaks instead of going with a service contract.
* Having employees expense their person cell phones. Bad idea for two reasons. First, you do not get as good a price as with a bulk plan. Second, if the staff member leaves or tries to start his own company, he has the phone number that all of your clients call on.
* Be aware of automatic renewals on leased business equipment. Such contracts, when they expire, roll over into new yearly or multi-year contracts without negotiation of length of contract or terms, potentially leaving you with a longer and/or more expensive contract than you could have secured through negotiations or price shopping.
Schneider urges small business owners to look carefully at their spending, particularly of service-related costs, as these can be an ideal source for reducing expenses, often without changing vendors. His trained staff at SIB also can help identify these areas with minimal involvement from the company and payment for services is only made as a percentage if savings are identified.
For additional cost-saving tips and information about SIB Development & Consulting, visit www.sibdevelopment.com or call 843-284-1007.