10 Top Ways for Your Small Biz to Cut Costs

The U.S. economy has been in a recession since December 2007, so says the National Bureau of Economic Research. Do your best to avoid becoming another business statistic by adopting these 10 cost-cutting steps.

Clean up your act. Give your company a physical, from top to bottom, recommends Mike Bauer, co-author of The Wall Street Diet: Making Your Business Lean and Healthy. That means examining all processes to see if you can be more efficient. Identify areas where you can eliminate waste and duplication.

Focus, focus. Redefine all goals so they are profit-oriented, says David Zahn, a small-business consultant and president of StartUpBuilder.com. And make sure all expenditures produce a return. If that means cutting back on trade shows and using that money for the Web site, then do it. If it requires eliminating a pet project that doesn't contribute to the bottom line, go for it.

Outsource. After focusing on what you're good at, outsource what you're not. "The number of functions that can be outsourced to companies in India and elsewhere is truly staggering," says Matt Edelman, CEO of PeopleJam, an online resource for lifestyle experts and reviews. "There may be some small quality trade-offs, but they will not be as substantial as the savings."

Dictate your terms. Get on the phone and negotiate with your vendors about price, payment schedules, quantity -- anything that'll keep you going. "Most small businesses don't realize they have the ability to change payment terms," says Bauer, who is also executive director, North American automotive at CSC. "You can get up to a 3% upswing in goods you purchase if you negotiate." If your cash flow is good and steady, offer to pay in advance of a shipment. Suppliers who need the money may be willing to bend a lot if they know they're getting paid. "In today's economy, if you have the money, you can negotiate terms from a position of strength."

Conversely, offer clients the opportunity to pay for your products or services at the current rate should you plan to increase prices next year, recommends Zahn. That will help your own cash flow if that's an area of concern.