You Can Profit Again in 2010

Although the economy has been difficult over the past several months, there is much potential for entrepreneurial businesses as larger companies struggle to survive.  In order for small business owners to be ready for anything, it is important for them to understand both their fixed and variable expenses. 

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.  With these things in mind, it is critical for the small business owner to always be on the lookout for creative ways to control other expenses. 

Pool Resources Where You Can

Many business owners are working with non-competitive business associates in a collaborative method in order to cut expenses.  For instance, two or three business owners may agree to share office space and other overhead such as equipment rather than each be responsible for the entire expense. 

Others have created co-op marketing campaigns and shared the expense. 

This co-operative strategy toward otherwise fixed expenses is an ideal way to lower your expenses fast, and see an improvement to your bottom line.  And who knows, this collaborative strategy may result in added referrals you might not have received otherwise. 

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.  Is it possible to outsource, or to use contract or part time labor so that you are only paying for work that actually needs 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.  Why not engage satisfied customers and business associates as your sales staff by offering a finder’s fee every time a lead they bring your way becomes a sale?  By using this strategy, you only have to pay your sales staff when you actually get a sale.  Cool! 

Rebid Necessary Expenses

Reality is that there will always be expenses you just can’t avoid, such as telephone, insurance, and bankcard processing.  But don’t be afraid to look for a better deal on these expenses, as the economy is becoming increasingly competitive, which you can use to your advantage.  Get new bids on these expenses frequently and your total expenses will decrease.  Even contract labor can be bid and improved, particularly as layoffs and lackluster economy provides more talented resources available. 

The small business owner who is able to adjust and make fast changes could be very successful in the coming year.  Studying your expenses and adjusting where it is possible is a terrific way to further improve that success. 

To get more small business success strategies, and to claim your free white paper:  “7 Ways Your Stone-Age Accounting System is Stealing Money From You Every Day … And, How to Get it Back This Year”   visit www.WebAccountingOnline.com.