Times are tough. One cannot turn to a single media outlet and not see it in the news, on the ticker, or on the radio. To an outsider, they might think that we are obsessed with how bad things are. Today for example, every media outlet has notified all Americans that there are at least 600,000 Americans without jobs today. That is a lot of people. But what are we doing about it? President Obama is rolling out a $800 Billion stimulus package. (Don’t worry, our kids will thank us for their massive debt..)
As a business owner or even as a manager, we must take a pro-active stance on this economic downturn. People are worried about losing their jobs daily. Are you taking all necessary precautions to avoid “downsizing”? Here are some tips on how to get more bang for your buck.
1. Trim the Fat
Take a close look at your spending and expenses? It helps to classify each one (if you aren’t already, you need to start now) by category. Then take each category and break it down. For example, “Office Supplies”. We are all familiar with this broad category. Looking at your ” Office Supply” purchases for the last three months, you need to ask yourself these questions:
Who is requesting office supplies?
Is it warranted?
Are these supplies necessary to operate our facility?
If these supplies are necessary, can we save by buying in bulk one time every three months, instead of monthly purchases?
Once you have a better perspective, you must act quickly and effectively on your analysis. Whether it is not buying name brand products, or cutting out the “condiments” for coffee, or just buying in bulk, you must act on it.
2. Re-evaluate Your Vendors
Where do you spend the bulk of your money? If you sell products, raw goods, or finished goods, then you are paying someone something. A fabrication company is paying for tooling, the retailer and the restaurant owner are paying suppliers. Are you getting the best possible price for the products or services your are buying? When is the last time you checked? If you let your salesperson know that you are checking out their competitors, it will light a fire under them, and if it doesn’t, that is your first red flag.
3. Outsource When Possible
Ask any business owner what their biggest hit on the bottom line is. 90% of the time you will hear employee pay. Whether you are growing or reducing, outsourcing is a great way to take the sting off of the bottom line. The company that hires a mid-level IT professional will spend around $60,000 a year on the salary. Let’s add insurance and 401K matching. Now you are looking at spending $75,000 for the same employee. Now lets say that your IT pro is efficient and keeps your ship running smoothly so that he doesn’t have to bust his hump everyday working on tech stuff. So let’s look at the big picture- $75,000 a year for an employee who may or may not have to work everyday to keep things running. If you outsourced your IT department, you would be spending a fraction of this. Even to say 25% of $75,000 would be a substantial amount of work for an IT firm, even if you were paying them by the hour.
4. Look at Energy Resources
Green is big, and getting bigger. When we were kids, there was only one place to get electricity from and that was the local co-op. Now you have literally dozens of companies to choose from. Doing the legwork to research all of these companies to find out what their rates and benefits are can be the worse part about this process. The best part is you are probably going to find out that you are spending too much and have an opportunity to save. (That is what we are trying to do, save money, right?) Be careful when searching online though, there are a lot of “energy brokers” out there who have already done the homework and want to charge you to tell you what they think is the best option for you. Often times these “energy brokers” are employed by certain energy companies or they are paid affiliates. Go to each company site, write down the 800 number, and call yourself. Only you know what your needs are and who can fill them.
One way to save money is to trim the marketing budget. Do you ever feel like you are rolling the dice with the new marketing campaign? What if you get absolutely no business from the commercial you spent thousands and thousands of dollars on? How is the ROI looking then? One way to gain exposure and web presence is to do a little free self marketing. Make sure you are listed in every yellow page, white page, super page, and directory out there. There are a lot of them and a majority of them are free. Then start a blog, touting your professional knowledge, and sharing with the world that you know your stuff. Do some research on the best adwords for your business, and incorporate them in your content. Get connected to other professionals in groups like Linkedin. There are a lot of companies out there that do this type of work, so you could technically outsource it if your time is more valuable spent elsewhere, but it is not that hard to get started. It is just the keeping on going that gets a little rough. But you can do it.
We are going to make it through this rough patch. My grandfather was a rancher, and there would be times when there would be months without rain, but I never saw him worry. He would always tell me that it has to rain sometime, it’s just sometimes later that what we want. We will feel the relief from this financial stretch sometime, but just like the rain, it will come in due time. But in the meantime, do the little things that you can to make your dollar stretch farther.