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Thursday, February 17, 2011

How To Reduce Your Small Business Costs

Most small business owners perceive the most basic of costs (office space, utilities, phone, computer) as fixed expenses that they can do little to minimize. As an alternative to leasing office space with a long-term financial obligation, working from home seems to be the only choice. However, how does this setting affect the professional image of your business when you need to meet with clients? Is it a faux pas to use a home address on your business card? It definitely depends on the size and the industry, but using a home office may hinder your target customer’s perception of your business and its legitimacy or capacity.

An alternative to consider would be a renting space at a virtual office. Compared to a traditional lease on office space, these facilities can be used on an “as-needed” basis and are fully-furnished with desk, chairs, computer, phone, internet, etc. Being able to work from a full-service physical location with a professional mailing address and pay drastically less than for a full-time suite is a huge cost advantage in itself. On top of that, throw in the added benefit of not having to pay for utilities or internet. Some virtual office centers even provide packages that include administrative services (faxing, copying, mail forwarding) and small business consulting.

Once you have done all you can to minimize your fixed costs, you can focus your attention on reducing variable expenses in other areas that may consume more time such as negotiating prices, bartering for products and services, buying used equipment, etc.

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