Travel is now a part of most businesspeople’s lives at some time or other but traveling can be an expensive business and searching for convenience and value should be part of your initial preparation. Thanks largely to the ability to make bookings for flights and accommodation over the Internet, there are now a number of ways to search out opportunities that can reduce business travel costs.

Airfares can be slashed

It really pays to shop around for airfares instead of just making reservations through your ‘usual’ airline. There are budget airlines with much lower standard fares than other carriers, but even the big-name airlines have specially discounted rates at some periods. Also check out the last minute specials that most airline websites include before making your reservations.

The fare of a flight is often based on seasonal prices at the time of purchase, regardless of when the flight will be made, so if possible book your trips during relatively low load times such as the end of summer. Also, prices in the middle of the week will usually be cheaper than prices at the end of the week, so a trip from Wednesday to Wednesday will cost less than from Saturday to Saturday.

Slam the door on hotel room costs

The accommodation business has undergone dramatic changes in recent years. Most properties now have what might be called ‘asking’ prices (or ‘rack rates’) that only the unwary or those who can afford not to care about money would pay.

There are three basic ways of working around the rack rates and finding out what cheaper rates are on offer. The first is to go to a site that lists discounted rates and packages at specific hotels and motels.  The second is to go to a site that lets you specify the location and type of accommodation but find the best deal from a range of matching properties. The last is to go to the big name hotel (after you’ve checked out the discount rates) and see if they can match or beat the other offers. Also look for packages that include meals and hotel facilities at no extra cost.

Look for competitive car rental rates

The same thing that’s happened to airfares and hotel rates has also happened to car rental rates. When you’re making a reservation for an automobile at your destination specify something small and inexpensive. At the very worst they’ll have it and you’ll save money. But there’s also a chance that you’ll be upgraded and get something better for the same amount.

Another way to save big is to shop for rental rates on the Internet and look for daily specials on the day you intend arriving. And don’t get pressured into buying expensive insurance while you’re driving a rental - you may be covered by your own vehicle policy anyway. Check first.

Don’t spend unwisely while traveling

It’s always tempting to use the minibar in your hotel room as a source of snacks and drinks, but you’re paying a very high premium for the privilege. It’s far better to bring these items with you and use the hotel’s refrigerator, ice and glasses that cost nothing extra.

Another way to purchase things at sky-high prices is to buy from the catalogue or trolley you see on some airlines while you’re cruising at 30,000 feet. Do you really need these things anyway, and why would you pay higher prices for them here than you would when your feet are on the ground?

It’s now possible to make phone calls and send email from commercial aircraft, but of course you’re going to pay a lot more than you would on the ground. Unless messaging is absolutely essential, wait until you’ve landed. Almost as expensive are the calls from your hotel telephone. Use a cellular phone or payphone and you’ll only pay half as much.

Room service in hotels is always a great treat but you’re paying a lot extra for it (and probably tipping as well). Most properties have a range of eating establishments and you don’t have to eat in the most expensive one. You’ll also save by not taking advantage of the hotel’s laundry and dry cleaning services - the shop up the street will be a lot cheaper

Cash flow is often called ‘the lifeblood of a business’, and for several good reasons. But the flow of cash into most businesses is uneven and there can be times when a constrained cash flow creates serious problems, even if the long term situation is positive.

There are, however, ways to improve the cash flow of any small business and remove some of the worries about bills not being paid or not having enough on hand to pay wages. These mainly involve no more than adjustments to what you’re already doing and so aren’t difficult to implement.

Keep inventories as low as possible

Inventories are expensive in many ways. There’s the interest paid on money borrowed to acquire items that are awaiting sale. There are also the costs for storage space and handling, as well as insurance expenses and the ‘opportunity cost’ of what money spent on inventory could be earning elsewhere. In some cases, inventories are so badly managed that much of the material becomes obsolete before it can be sold.

Having too much inventory is an indication that business process problems exist in the organization. Some of these problems include poor sales and operations planning, inaccurate forecasting, ineffective production scheduling, and the existence of bottlenecks in one or more systems just to name a few of the possibilities.

Inventories can be reduced by focusing on fast turnover lines or cutting down on the number of items in stock by negotiating with suppliers for faster replacements. Improving sales forecasting and optimizing production planning are other areas to look for improvements.

Making minor process changes and a better utilization of processes and systems already in place will allow most businesses to achieve an inventory reduction of 20% or greater quickly and without a great deal of expense.

Reduce your repayment obligations

Even the smallest business probably has at least one loan for stock and operating expenses, a loan for a motor vehicle, a loan for some form of capital equipment, and a credit card or two for travel and entertainment. 

You can save a great deal of interest and improve your cash flow position by consolidating as many of these loans as possible into just one monthly repayment and negotiating a loan term that’s in line with your cash flow and income projections rather than have it dictated by past conditions that may no longer apply.

Watch your invoicing

Prepare your invoices promptly and send them out on a regular basis. Customers are more prepared to pay a bill on time if it’s received shortly after they’ve received their goods or services. The longer you wait, the longer they’ll wait to pay you.

Reward C.O.D. or fast payments

A discount for cash or fast payments is a good incentive for customers to pay you quickly – even ahead of other creditors who don’t offer a reward for early settlement of their accounts. The old system of ‘2% discount if paid in ten days or the net in thirty days’ still isn’t bad if you can communicate it and enforce it, although payment within sixty days is now more common if customers are allowed to get away with it.

Credit check every customer

Some small businesses make the big mistake of taking on customers solely on the basis of their appearance. If the customer pays cash for their first order they might even forego a credit check. This can be a big mistake that leads to massive cash flow and debt collection problems. Give every customer a thorough credit check and if in doubt ask for references from other firms before letting them run up a bill with you.

Try bartering for what you want

Because bartering uses something in your inventory to pay for something your business acquires it can benefit cash flow to a degree. Bartering can be particularly beneficial for service businesses with unused capacity, such as a plumber exchanging labor for capital equipment. Bartering also offers some valuation flexibilities that can increase the value of benefits received.

Small businesses can achieve some pretty good savings by sharing with each other. On its own, a business turning over a million dollars or so might not have a lot of clout, but when two or three small businesses team together to share something they can collectively reduce their total costs.

Share space costs

Most businesses require office space plus additional space for storage, warehousing or some other purpose. As businesses grow they tend to require more space and this often becomes a factor in moving the entire business to larger facilities.

If you need more space you can place an advertisement in local newspapers inviting nearby firms with excess space to contact you. You’ll also hear from a number of real estate agents offering to lease you more space but one or two might actually be offering bargain space that’s someone else’s surplus. And if you have extra space you can advertise it in local newspapers or place it on the market through a real estate agent.  Even if you think you may need it in a year or so you can lease it out for a short term and probably find a tenant with a temporary space requirement.

As a ‘sweetener’ to attract a tenant you might be able to offer to share some of your facilities with them – office equipment, loading dock, security service and so on. If you’re already paying for them it won’t cost you any extra to use them as inducements to gain a tenant for your expensive, unused space.

Share equipment costs

If there are a number of small businesses in the same building, it’s possible for each of them to save by sharing expensive items of office equipment and setting up a central facility. Such services as photocopying, faxing and employee meal preparation all require equipment that can be shared by a number of firms.

Share people costs

Another way to save by sharing when businesses have a common location is to rationalize certain positions. A receptionist can look after the needs of several small businesses. Bookkeeping and security personnel can also be shared in these situations.  Sharing equipment and people will mean working out a lot of details between the businesses, of course, but the potential savings are there if the firms can agree on the way they will be achieved.

Share purchasing savings

Most businesses spend money on vehicles, travel, stationery, telephones and any number of common business related products and services. By working together to identify future purchases - of vehicles, for example - businesses can buy together and negotiate big savings. Purchases of stationery and office supplies can be guaranteed at a certain minimum monthly level and a percentage discount off regular prices agreed with suppliers.

Other possibilities, like introducing VoIP telephone services, do require an initial capital investment, but if several businesses do it at the same time they can share the costs of hardware and software and reduce their setup expenses.

Purchasing of everything from advertising space in local papers to printing costs of leaflets and business cards can also be done in conjunction with other businesses to create savings. Suppliers may try to reject joint buying on the basis that all advertisers or print customers have to be invoiced individually, but ultimately money talks, providing minimum levels of purchases can be determined.

Handled intelligently, taking advantage of sharing opportunities can shave up to five or even ten percent off most purchasing done by small businesses. It’s certainly worth exploring, even if it takes a bit of effort to get the process underway.

Many businesses do their non-cash banking via the Internet. It’s convenient and fast, but it can expose the business to fraudulent operators that use a range of electronic trickery to loot online accessible bank accounts. There are a number of things you can do to protect your business from these con artists.

Protect your passwords

Make your password hard to guess. Don’t use things like birthdays, telephone numbers or street addresses as passwords and don’t use the same password for more than one account. The best passwords are meaningless. e2Kb5C1dd isn’t going to be easily guessed, nor is it likely to be generated by a random password generating program used by the conmen. Your password will be even safer if you change it regularly - every month is a good idea.

Restrict knowledge of details like user names and passwords to as few people as possible, and don’t write them down even if you think you’ve disguised them by converting them to phone numbers.

Be careful using the Internet

Be sure nobody is observing you whenever you enter your user name and password to access your bank account. Don’t use a computer outside the office to access your account unless it’s absolutely necessary. Always key in the bank’s Internet address; don’t go there by clicking on a link in an email - it could be taking you to a false address. Look for a padlock symbol in the bottom right hand corner of your browser. It denotes an encrypted site that ensures a secure transmission of data.

Be sure that any computer you use to do Internet banking has a firewall and antivirus software installed. When you finish your browser session log out and close the browser, and even when using the computer in your office don’t leave it unattended while you’re logged on to the banking website. It’s even better to take your computer offline when you’re not using it.

Keep virus protection up to date

Viruses are bad enough when they pop up annoying advertisements or cause your PC to stop functioning. They also have the ability to hide a hidden code that can transmit your banking details to a third party or allow someone to take control of your computer.

You should update your antivirus software each day or at least before beginning any online banking session. You also need a firewall that acts as a ‘gatekeeper’ between your computer and the Internet. This is most important for anyone using a cable or wireless modem.

Never open email attachments from unknown sources; these attachments, no matter what they might seem to be, can contain viruses. Even attachments from someone you know can be a ‘spoof’ and have been sent without their knowledge. Caution at all times is required.

Beware of hoax emails

You may receive an email from your bank or other financial institution requesting you to ‘confirm’ your login information or to reveal your password in some other way. These are common hoaxes.

If you do receive one of these hoax emails delete it and notify the financial institution. Don’t click on any links within the email and never provide the sender with any information. Many of these hoax emails contain viruses or will take you to a site where a virus can be loaded onto your computer without your knowledge.

“The best executive is one who has sense enough to pick good people to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.” - Theodore Roosevelt