The Globe and Mail

Managing cash flow can be the single most challenging aspect to managing a small business, particularly in times of steadily increasing costs. For good measure, many small business owners believe "it costs what it costs," which is simply erroneous. Here are 10 tips for small businesses to reduce operating costs and increase cash flow:

1. Leverage consumable spending. It may seem that purchasing paper towels or hand soap periodically is not a significant investment. Nevertheless, if you consolidate this spending with fewer suppliers, you’re more likely to obtain volume discounts. Consolidating purchases of janitorial supplies with packaging materials, for instance, can result in an attractive piece of business for many suppliers who offer a one-stop shopping experience and can reduce your costs in the end.

3. Negotiate cell phone plans. The market for cellular service continues to heat up, and by following these three simple rules your costs can be dramatically reduced. First: investigate online offers against in-store offers, as there are often differences in pricing and features. Second: If you’re looking for improved features or pricing, call the provider’s customer service desk and ask to speak with the customer loyalty department to stress your concerns. These people are paid to retain clients and their power far surpasses that of a typical hotline attendant. Third: If you have made the decision to change carriers, request the competing carrier include your cancellation costs as part of the incentive to move your business. Many of the larger carriers will offer discounts which cover up to 90 per cent of the cancellation penalty charge.

4. Switch your telephone service to VoIP (Voice over Internet Protocol). The increasing speed of internet connectivity is making VoIP (Voice over Internet Protocol) an increasingly popular option, and there are a growing number of companies offering VoIP (Voice over Internet Protocol) telephone service at a fraction of the cost of a typical telephone land line.

5. Need a chair? Buy someone else’s. Upgrading or adding office furniture can be an expensive proposition. Fortunately there are several businesses that sell high quality used furniture at a fraction of the cost. Because many of these dealers tend to be small businesses themselves, customer service levels are as a rule high and limited warranties are often available.

7. Spend time on valuable tasks, and outsource the rest. Time is our most precious resource, and is at a premium when operating a small business. Be conscious of those activities that absorb unnecessary time and do not provide direct value to your customer, at the time search for opportunities to outsource. You likely are already using a lawyer, an accountant, a banker, and possibly a realtor, however are there other areas which absorb your time and provide no value in growing the business? Increasingly, more businesses are taking advantage of virtual assistants to provide real-time virtual help with office tasks, reporting, and even marketing efforts.

10. Develop successful habits. Managing operational costs is an ongoing venture; after all, doing so can provide significant returns in the form of increased cash flow. Developing a few simple cost management habits is the most effective means to free up cash for furthermore investment into the business: obtain more than one quote; rely on your suppliers to support you as a partner in your success; seek partners who understand your current business position and who will support your growth; treat everything as negotiable, nevertheless manage your investment of time appropriately; and seek professionals to manage those tasks that do not add value to the business.