Small businesses can achieve some pretty good savings by sharing with each other. On its own, a business turning over a million dollars or so might not have a lot of clout, but when two or three small businesses team together to share something they can collectively reduce their total costs.
Share space costs
Most businesses require office space plus additional space for storage, warehousing or some other purpose. As businesses grow they tend to require more space and this often becomes a factor in moving the entire business to larger facilities.
If you need more space you can place an advertisement in local newspapers inviting nearby firms with excess space to contact you. You’ll also hear from a number of real estate agents offering to lease you more space but one or two might actually be offering bargain space that’s someone else’s surplus. And if you have extra space you can advertise it in local newspapers or place it on the market through a real estate agent. Even if you think you may need it in a year or so you can lease it out for a short term and probably find a tenant with a temporary space requirement.
As a ‘sweetener’ to attract a tenant you might be able to offer to share some of your facilities with them – office equipment, loading dock, security service and so on. If you’re already paying for them it won’t cost you any extra to use them as inducements to gain a tenant for your expensive, unused space.
Share equipment costs
If there are a number of small businesses in the same building, it’s possible for each of them to save by sharing expensive items of office equipment and setting up a central facility. Such services as photocopying, faxing and employee meal preparation all require equipment that can be shared by a number of firms.
Share people costs
Another way to save by sharing when businesses have a common location is to rationalise certain positions. A receptionist can look after the needs of several small businesses. Bookkeeping and security personnel can also be shared in these situations. Sharing equipment and people will mean working out a lot of details between the businesses, of course, but the potential savings are there if the firms can agree on the way they will be achieved.
Share purchasing savings
Most businesses spend money on vehicles, travel, stationery, telephones and any number of common business related products and services. By working together to identify future purchases - of vehicles, for example - businesses can buy together and negotiate big savings. Purchases of stationery and office supplies can be guaranteed at a certain minimum monthly level and a percentage discount off regular prices agreed with suppliers.
Other possibilities, like introducing VoIP telephone services, do require an initial capital investment, but if several businesses do it at the same time they can share the costs of hardware and software and reduce their setup expenses.
Purchasing of everything from advertising space in local papers to printing costs of leaflets and business cards can also be done in conjunction with other businesses to create savings. Suppliers may try to reject joint buying on the basis that all advertisers or print customers have to be invoiced individually, but ultimately money talks, providing minimum levels of purchases can be determined.
Handled intelligently, taking advantage of sharing opportunities can shave up to five or even ten percent off most purchasing done by small businesses. It’s certainly worth exploring, even if it takes a bit of effort to get the process underway.