The downturn of the world economy has seen many businesses post losses. As a result, most business owners are at their wits end on how to save money on business essentials. But, with the following eight tips, you can still save a buck or two and increase your profit margin.

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1. Reduce Your Information Technology (IT) Costs

You can reduce business IT costs by outsourcing your IT support systems. By switching to cloud-based storage services, you will first save on software costs. Cloud computing services come with up-to-date software. In addition, you will no longer need to buy, install, or maintain expensive servers and in-house data storage systems.

2. Use Affordable Communication Systems

Using traditional phone networks for your business communications is costly in the long run. Instead, switch to affordable internet-based services such as VoIP, Google Voice or Skype. Your staff can also use emails or social media platforms like Twitter to communicate with each other.

3. Save on Premises Costs

If your business premise is bigger than you need, consider moving to smaller premises or rent out the extra space. And if you can get some members of your staff to work from home instead of the office, do so. For those who remain behind, insist on simple cost saving habits such as turning off devices instead of leaving them on standby. Also, use low-energy light bulbs to reduce your lighting bill.

4. Reduce Online Payment Costs

Operating a merchant account can take up a significant part of your monthly income if your business is small. So, if your sales do not merit having one, switch to online payment systems like PayPal or Clickbank. Instead of monthly fees, they charge a small fee per sale.

5. Lease Equipment

Buying equipment requires a large capital investment which your business might not have. Upgrading any purchased equipment is also costly. By opting to lease rather than buy, you reduce the cost of acquiring, maintaining, repairing, and upgrading equipment.

If you must equip your business by buying, use a coupon website such as 7 Coupons instead. You will save a lot of money this way. Make further savings by hiring out under-used equipment such as vehicles and office furniture to other businesses. Just ensure that your lease agreement permits subletting before doing so.

6. Deal with Rising Staff Costs

Where possible, outsource some of your office work or projects to freelance workers. Also, use contract packing services for stock dispatch. But, the best way to reduce staff overheads is to increase staff productivity by hiring multi-purpose staff. If your employees have more than one skill set, you get multiple tasks done with a leaner, cheaper workforce.

7. Use Video Conferencing Instead of Travelling

Lower traveling costs by going on business trips only if you have to. With today’s advances in technology, you can hold business meetings using video conferencing services. But, if your staff must travel to meetings, traveling by rail is a good alternative to flying.

8. Use Fewer Suppliers and Renegotiate Contracts

Instead of getting your business supplies from many suppliers, focus on a few and negotiate for favourable terms. And because times are hard for everyone, a supplier will jump on the chance to form a stronger alliance with a client even if it means renegotiating the terms of a contract.

Conclusion

Despite the global economic recession, it is still possible for your business to reduce its overheads and increase its profits. First, outsource your IT services, switch to cheaper communication systems, and move to a smaller business premise. Also save money by using online payment systems like PayPal, reduce your staff overheads, and where possible lease rather than buy equipment. Finally, travel by rail instead of by plane and narrow your supplier base.

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