Pay Less for Business Necessities
Think your company can't get any leaner after all your expert budget trimming? Think again!
In addition to making the usual cuts, Rene Siegel, president of High Tech Connect, a PR consulting firm, negotiated deals with her suppliers, clients, and utilities in order to keep her business afloat – saving her company big over the last year.
How did she do it? Simple. She asked. "It doesn't cost anything to ask," she says. "For me, that's the main lesson. My team has worked hard and every nickel and dime adds up."
Here are eight ways to renegotiate your business essentials.
1. Research: Siegel compared her lease with prices of other commercial spaces in her city. "If you find that other spaces with better location are cheaper, you might be able to negotiate with your landlord for a lower rate." Her property manager initially offered a 5 percent reduction, "But we did our research and submitted a very professional letter to the property owners with copies of other property rates and got 10 percent off." She did the same thing with banks. She found a competitor that offered better rates for a money market account than her current one. "We asked them to meet or exceed that rate and got them to waive the monthly service charge."
2. Consider consultants you already know and trust: When Siegel's accountant resigned from the firm to start her own business, High Tech Connect was her first client. "We were able to maintain good standing with the large firm, and now we work directly with our accountant, for $50 less per hour."
3. Choose a la carte vendor services: After 10 years with a professional employment organization that provided HR and payroll services, Siegel explored other options. "We evaluated and eventually moved our payroll from the full-service PEO to a standard payroll service and an á la carte HR service. These savings represented enough cost savings for us to add a full-time, sales- and operations-focused vice president to our team."
4. Say yes to bundle: She consolidated all land and wireless phones into one plan, and did the same with high-speed internet and cable TV to get more attractive rates. "These companies will not tell you there are better plans for your business. You need to ask and spend the time. Then they know you can and will take your business elsewhere."
5. Communicate with your clients: Be honest with your clients about the current necessities of your company. Cisco Systems required High Tech Connect to have expensive insurance to do business with them, but as Siegel's business dwindled due to the economy, she got new terms. "We contacted the procurement manager who executed our contract, explained our situation and eventually got him to give us lower levels of errors and omissions and lower umbrella insurance levels." This alone has saved the company thousands this year.
6. Better rates. More supplies: Leverage your good credit and payment history with the vendors you use for office supplies, copies, shipping, and many other business-related services. "Many reward prompt payers with discounts."
7. Barter: "Just be sure to put something in writing, even informally, to ensure a positive outcome."
8. Pre-pay: Consider any regular expenses that might qualify for discounts if you pay in advance. Siegel asked her internet hosting service for a discount if she pre-paid for a year's worth of the service. "They gave us one month free. Not huge savings, but it also saved time and money for my accountant to enter and cut one check versus 12."
