It’s no secret that times have been tough for the economy over the past year, but with the downfall of many big corporation and organizations, small businesses everywhere are seeing potential for 2010 like they’ve never had before.  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.  These challenges demand that the small business owner always be looking for new and improved ways to manage their other expenses. 

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.  One example is that many business owners have combined resources to share office space rather than each having to foot the large fixed expense alone. 

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.  Another added bonus is that sales often increase due to referrals that you wouldn’t have 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?  A shift from a fixed to a variable expense can many times result in an immediate improvement to your bottom line by decreasing your overhead substantially. 

Many small business owners feel that sales employees are a necessary fixed expense, but there are even some solutions for keeping this expense in check.  Why not consider putting your customers and business associates to work referring you business by offering a referral fee each time a lead they send you becomes a sale?  By using these resources, you will only have to pay when you actually make a sale.  Nice! 

Rebid Necessary Expenses

Unfortunately, there aren’t creative ways to cut or avoid all expenses, especially things like bankcard processing, telephone, and insurance.  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.  Re-bid these costs regularly, and you will see a decrease in your total expenses.  Even previously challenging expense categories, such as contract labor can now be renegotiated, because layoffs and dull economic conditions are creating a pool of more capable resources to choose from. 

This year can provide amazing advantages for the small business owner who is more flexible and can make changes quickly.  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.