Cutting Small Business Expenses


As a small business owner in Maryland I never thought that I would be interested in what was happening in China, or Portugal or Greece. Now I watch Erin Burnett every morning and listen to her two minutes of business wisdom. Fortunately my business is not at the mercy of fluctuating interest rates but some of our advertisers are. I know of business purchases that didn’t happen because the buyer couldn’t borrow the money and of credit lines that have been tightened to the point of strangulation.

My Daddy raised a tightwad. It comes from being a part of a long line of Scottish tightwads and it turns out that it was a good thing. I am very conservative with money.

That doesn’t mean I don’t try new things or new ideas but it does mean that I hate paying excessive credit card processing fees and switched to the Paypal processor and am saving $10,000 in bank credit card processing fees over the course of the year.Take a look at your total credit card fees. I bet your average percentage is a lot higher than the rate the processing company said they would charge you. Have you checked it out?

Turns out, at least for us, they charge extra for American Express cards and even more if it’s a reward card. They charge extra for corporate cards rather than personal credit cards and they charge more if you don’t actually get to see the card but are doing payments over the phone or set up as a monthly payment. We had a big checkmark in the yes column for all of those things so we switched and now use Paypal to do our credit card processing.

The fees on VISA cards have gotten so high that a number of colleges and universities no longer accept payments using a VISA card. College of Charleston estimates that it will save 1 million dollars in credit card fees this year for refusing to use VISA cards. They will still take MasterCard but not VISA and save a million bucks. It’s crazy that credit cards processing fees have gotten so out of hand.

I just read the new Pitney Bowes lease and found out that they are going to charge us extra to lease their darn postage machine unless they approve our insurance coverage. Come on, it’s a $500 machine that is five years old and you want extra insurance on it?

Those little expenses add up. It’s easy to add 2-4% to business expenses on inconsequential things. When business is tough 2-4% can be the difference between keeping an employee or letting her go or having enough reserves to launch a new product. I choose to cut the expense, keep the worker and launch a new product.