How Your Business Can Profit Again in 2010

March 10th, 2010 | admin | forex educational

The difficulties that big businesses have experienced over the past several months are opening doors for small business owners to achieve renewed success. Small business owners must be ready for these potential increases in business, and having a good understanding of their fixed and variable expenses is a critical part of this.

One expense that has increased for many small businesses is debt service, as the bank panic of 2009 caused many revolving debt facilities to be amortized. And it is only possible to cut some expenses, like marketing and staffing so far without seeing a negative impact on sales. Because of these challenges, the small business owner should always be on the lookout for creative ways to keep their other expenses low.

Pool Resources Where You Can

One new idea is that business associates in related but not competing fields are pooling their resources to realize lower expenses overall. For example, they may choose to share rental space with one another rather than be strangled by expensive lease obligations.

Another great use of this co-opt philosophy would be to joint venture with an associate in a related field that would be beneficial to your ideal customer on an advertising or marketing campaign rather than foot the entire bill yourself.

Strategically combining resources is a great way to immediately improve what could otherwise be costly fixed expenses, an almost instant improvement to the small business owner’s bottom line. As an added perk, you often receive referrals from your participating associates that you would have never otherwise received.

Replace Expensive Staff Overhead Where You Can

A number of small business owners have decided to forgo costly employee overhead and are instead using non-traditional staffing techniques to meet their needs. Can you replace your permanent staff with contractors, temporary or part-time workers who only need to be paid when there is work to be done? By creating variable rather than fixed expenses, you would be able to substantially reduce overhead and cause an immediate improvement to your bottom line.

Although sales staff is often considered indispensible to the success of a business, there are some innovative ways to reduce this expense as well. What do you think about using your customers and business connections as your sales staff by offering finder’s fees that will be paid at any time a lead becomes a sale? This technique allows you to only pay out when you actually get a sale. Nice!

Rebid Necessary Expenses

There will always be expenses you just can’t get away from, such as insurance, telephone, and credit card processing charges. But, as the economy becomes more competitive, so do many of these businesses, and it is important to be always on the lookout for the best deal. Have your vendors bid out these expenses periodically and you could see a significant decrease in your overall expenses. Even contract labor can be bid down successfully, as our economic conditions are causing a larger and more talented pool of available contractors.

This year can provide amazing advantages for the small business owner who is more flexible and can make changes quickly. Analyzing expenses and making changes where you can is a great way to add to that success.

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