If your business is in a slump, or you’re losing money, or critically short on cash, or, even worse, have gotten yourself in a position where every new contract, every new customer actually loses you money, you must cut expenses.
1. Take nothing for granted.
Look over the past 6 months bills and find out where it's going. Then slash and burn. Do you really need that extra phone, heck that extra phone line? The 800-number? A night receptionist? A secretary for each partner?
2. Be ruthless about help.
Is that outside sales person really earning his keep? Ask employees to cut hours or take cuts in pay. Be prepared to fire someone. Replace with student intern. Switch to temps, they don't need insurance. Or to Virtual Assistants, they don’t require your supplying a desk, computer or health insurance. Take a cue from the telemarketing companies – my VA who lives in India, works for $6US an hour.
3. Don’t do anything designed to “keep up appearances,” or you’ll “look good” all the way down the drain.
4. Cut out “frills” and defer maintenance.
From free pop for the employees to the brand of toilet paper in the restroom to those Sanford Ph.D. pens you’ve been supplying to business lunches at The Club. Cut out the paper cups and take turns washing dishes. Start a coffee fund. Give up parking at the door. Recycle used paper to make note pads.
5. Do things you were paying others to do.
Clean the floors yourself. Physical exercise is good for the nerves.
6. NOTHING is off limits.
Including bonuses, 401ks, personnel, your wardrobe, the company picnic, supporting the Little League team, subscribing to trade journals, attending seminars.
7. If you have folks on expense accounts, tell them to sharpen their pencils.
Make it clear you're reading those things. Make it clear what the limits are. And lower them by 50%.
8. Don't overlook the obvious.
What is the thermostat set at? Do you turn off the lights when you leave at night? Who’s flying who could be driving?
9. Go back and comparison shop for every service you need.
Find a lower phone rate, a cheaper janitorial service, cheaper paper with free delivery, cheaper service provider, cheaper computer nerd.
10. Ask others for help, and renegotiate everything.
Changing out tenants is expensive. Your landlord might lower your rent rather than lose you.
About the Author
©Susan Dunn, MA, The EQ Coach™, http://www.susandunn.cc. Coaching for individuals around emotional intelligence. Marketing for professionals on the Internet – http://www.webstrategies.cc. Mailto:sdunn@susandunn.cc for free ezine.