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. 

The tightening of bank credit over the past year has caused debt service to increase for many small businesses as they have found their revolving lines converted to term loans.  And the small business owner can only cut other expenses, like staffing and advertising so far without a negative impact on the company’s sales and lead generation.  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 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?  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.  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?  By using these resources, you will only have to pay when you actually make a sale.  Cool! 

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.  Get new bids on these expenses frequently and your total expenses will decrease.  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. 

The small business owner who is able to adjust and make fast changes could be very successful in the coming year.  Researching options and possibilities for decreasing expenses is a fantastic way to improve that bottom line even more. 

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.