In these tough times, the biggest impact of the economic downturn is being felt by the small business sector. This is largely because of the fact that there are fewer resources available to counter the effects of an uncertain economy. The best way for a small business to thrive nowadays is by cutting costs. Practicing frugality in your business does not mean that you are sacrificing the quality and service level of your company. Cost cutting on certain aspects of your business could just be the economic stimulus needed to let you bounce back from an economic spiral.
Basically, there are six areas you can start spending less on but still retain the quality of your products and services. These are: technology, overhead costs, fixed assets, marketing, insurance or finances and travel. Every entrepreneur knows how important it is to be updated on the latest trends in technology to give the business a fighting chance with its bigger competitors. This does not mean however, that you need to spend more than what you can realistically allot. There are cheaper alternatives you can find as long as you do your research on what they are. Like for software, there is open-source software which offers similar features with commercial products at a lower cost.
You also might want to look into using energy-efficient technology. There is a tax benefit to help promote green technology plus it would also be beneficial to the environment. You may also try using VoIP which would save you at least 60% of your original spending for telecommunications. Since small businesses rely heavily on the internet, you can also try looking for cheaper web hosting companies. You need to remember that the content of your site is still the most important. You could optimize the site using SEO so you do not really need to spend a fortune on web hosting. There are several web spaces that are free and yours for the taking.
For marketing concerns, you might want to try taking advantage of social networking influence. What you just need is the time to update your blogs, announcements, tweets and even status messages to let your network know that you are in business. You also would need to realize the power of the spoken word of your customers. They are your best advertisers and it is your responsibility to keep them hooked to your products and services. With regard to your finances, you need to study which would be more cost-effective and timely to you. You may want to preside over the administrative responsibilities with payroll, human resources and benefits but if it would take too much of your time and money, you can consider outsourcing it to other companies and just focus on the day-to-day operation of your business instead. If your business requires for you and your employees to travel, you might also want to consider using coupons to get discounted fares and cheaper hotel rates.
The goal is for you to reduce your expenses by getting rid of the unnecessary cash outflow. Being frugal is not being cheap. Rather, it would give you more opportunity to invest the money you can save for other areas in your business like in additional benefits for your employees, who are the lifeblood of your company.