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© 2002 Diane Hughes

One of the primary concerns all small businesses have is saving money.
When it's time to trim the fat, most look for one giant expense to
decrease or eliminate in order to stay within budget. More often than
not, it doesn't work that way.

Most budgeting experts will tell you that re-evaluating your overall
expenses and cutting each by just a bit will actually gain you more
ground than doing without something major that you really need. Here are
a few ideas of areas to look at and costs to reduce that can have a
major impact on your overall profits.

1) Internet Access - Every online business owner must have access to the
Web. But consider this. The market is so flooded with ISPs that you have
a lot of room to dicker. Start by searching the Internet under keywords
like "cheap internet access" or "discount isp" to bring up lists of
possibilities. Then, do one of two things.

(a) Try some of these independent ISPs. Smaller companies can have high
quality service and support just like the "big boys". One business owner
I know recently switched from Prodigy ($21.95/mth) to a smaller ISP that
only charges $12.50/mth with no contracts. She actually liked the new
provider better and it costs her about half as much. [Savings of $113.40
per year.]

(b) Renegotiate with your existing ISP. Most larger ISPs know you have a
choice of a thousand other companies. Because of this, they are normally
more than willing to renegotiate your costs. Be honest. Tell them you
are a small business owner and you need to cut expenses. Explain that
you've been pleased with their service but will be forced to go with
someone else if some sort of arrangement isn't worked out. Another
friend of mine did this and received 6 months free! Most will offer 2-3
months free and/or a discount with an annual agreement. NOTE: When you
approach your ISP, be fully prepared to switch to someone else if your
offer is rejected. [Savings of $105.80 per year with 3 months free and
reduced, annual rate.]

2) Switch From A Merchant Account To A Payment Service - If you have a
low volume of credit card transactions, it might benefit you to switch
from a merchant account to some sort of payment service like Pay Pal or
ClickBank. Statement fees, monthly fees, discount percentages and the
like can all add up to big money.

While payment services normally have reduced fees, they do have higher
"per transaction" costs so you'll have to do some math to find out if
this is a good idea for your business. Just take an "average" invoice
amount from a sale and multiply it times 12 to get a base total to work
with. Now, add in your 12 months worth of fees for statement, monthly
access, discount percentage, per transaction cost, etc. This is your
"example" total. Do the same with several payment services using their
costs to see which one, over time, would be less expensive for you. 

If you were paying a $15 statement fee, $20 monthly fee, 3% + $.35 per
transaction and $25 monthly gateway fee, your annual expenses would be
$742.20 for an average transaction of $50.00. Your annual fees for a
payment service with 3.5%, $1.00 per transaction and a one-time $50.00
set up charge would only be $83.00 per year. [Savings of $659.20 per

3) Re-evaluate Your Long Distance Costs - Competition is the small
business owner's friend! With hundreds of long distance companies out
there, you can drastically reduce your charges instantly. Again - use
the 'Net to search for inexpensive long distance service. A business
owner I know changed from a MCI "program" to one of those 10-10
companies and reduced her per minute charge from $ .07 to $ .05.
Depending on the volume of calls you make, some programs offer rates as
low as $ .03 per minute. [Estimated savings of $20-$30 per year for
1,000 minutes.]

>From just these three little things, we've saved an estimated $802.60
per year. That's enough to make anyone's spreadsheet sing! Go through
your list of costs and you will most likely find other expenses that can
easily be reduced with a bit of research and a phone call or two.

Visit Diane Hughes, editor of the popular ProBizTips Newsletter, at