As harder economic times seemingly approach identifying appropriate ways to tighten our belts is becoming more important.  Of course, it is always a good idea to streamline operations and reduce expenses regardless of economic circumstances.

Information Technology represents a larger portion of a small business’s expenses than it ever has before.  I believe this is for good reason.  Information technology has provided us with efficiencies that were not possible years ago.  For this reason it is important to eliminate waste so that budget dollars can be directed towards the most effective initiatives.

Review Expenses

To effectively reduce your costs you need to know what they are.  Review your books and identify the categories with the largest expenditures.  This is where you are usually going to find the most savings.  Work your way down to the smaller line items from there.  You should also identify any future expenses that may be approaching such as software subscription renewals, lease buyouts and new equipment purchases.

Tie these expenses to operational goals so that you can determine where your spending priorities should be.  Identify the functions that various products and services are expected to provide in support of these goals.  The objective is not just to reduce total spending, but to increase the overall effectiveness of what you do spend.

When you identify an expense that does not support any operational goal work to eliminate it.  If an expense is meeting a function, ensure that it is doing so cost effectively.

Use Free Software

Rather than pay expensive licensing fees for office suites, image editors and database servers use free software instead.  No need to abandon Windows if that’s what you are comfortable with.  There are several good reasons why so many of us use it.  However, by choosing to use open source software and freeware for your other applications you can save thousands of dollars.  Packages like OpenOffice, Paint.NET and MySQL are every bit as effective as their pricey commercial counterparts.

I have been advising my clients to switch their database services over to MySQL, for example.  Of course, the instant two grand in savings over Microsoft SQL Server makes it an easy decision.  In every case MySQL has performed in exemplary fashion and the client has always been satisfied with it.

There is a high quality free software package in just about every category.  Check out the Free Software Catalog before you purchase software.  And remember, one of the best things about freeware and open source software is the trials are always free and they don’t timeout.

Perform Appropriate Upgrades

If you are working with PC’s that are falling behind the workload, evaluate your upgrade options before simply replacing them.  You can breathe new life into a computer by adding some more memory.  A typical RAM upgrade will cost between $50 and $100.  Use the Memory Upgrade Advisor on each of your computers to see what upgrade options are available.  Increasing a desktop PC from 1 to 2GB, for example, will yield a considerable performance improvement.  Couple this upgrade with a reinstall of the OS (without the bloatware) and your computers will be revitalized. Users will feel like they really did get new PC’s.  This will also result in fewer support calls and greater productivity.

Is your file server not keeping up either?  Before buying a new one consider “Network Attached Storage” or NAS.  A NAS Server is essentially an external hard drive (or array of drives in a single chassis) that attaches directly to your network.  Users access the drive as a network based file share just like they would a Windows server.  A typical device includes 1 to 2 TB of space, provides for one or more RAID configurations and is usually smaller than a desktop PC.

A Windows based server will cost you thousands of dollars, but there are several NAS options available for less than $1000.  And by taking some of the load off of your current file server you will be extending its useful life as well.

Review Subscription Services

As time goes on we find ourselves with more and more subscription based web services.  Services like hosting, email marketing, pay-per-click advertising, online backup and others can really begin to add up.  Review your usage and the effectiveness of these services.  Eliminate those that aren’t being used or don’t properly meet the function.

Of course you should keep the ones that are performing an effective and valuable service.  For those, verify that you that you have the appropriate subscription level for the features you use.  There is no point in paying for the premium plan if you are only using the standard plan’s features.

Keep an eye on your renewal pricing.  I had several domains with Yahoo and then they increased their renewal price from $9.95 per year to $34.95.  Ouch!!  Creeps up on you - kind of like car insurance.  I just saved a bunch of money by switching my domain services to Go Daddy!! Less than $8 each covered the transfer and an extra year on the registration.

Speaking of domains, stop renewing the ones you are never going to use.  If you have a good domain name that you are not using, consider selling it to mitigate other expenses.  Go Daddy can help with that too.

Shop Online

When you are in the market for new equipment, printing supplies and other goodies make sure you shop online.  That does not mean you must buy online, but make sure you shop there.  When you shop online you are able to do better research.  You can compare options, read reviews, check prices.  Then while you are doing your hands-on in-store shopping you will be armed with the knowledge to make good purchasing decisions.

In many cases you will find that buying online will be advantageous.  Online merchants usually offer better prices than the big brick-and-mortar chains you are likely to visit.  Shipping charges will often be offset by sales tax savings.

The Store here at GARA.com contains a large database of coupons and other offers from top online merchants.  Use it to help in your research and to find additional savings from the merchants that you do business with.  Subscribing to the Current Deals Feed is also a great way to stay informed about current pricing and promotions.

Be Vigilant

Once you have identified your savings opportunities and made the changes to implement them you must stay vigilant.  New expenses find a way of creeping into an operation all of the time.  Make expense review a regular part of your IT management activities and always make sure your technology dollars are directed towards effective solutions that support your goals.

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This entry was posted on Wednesday, October 15th, 2008 at 10:24 am and is filed under Business Solutions, Free Software, How To, Solutions Store. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.