Navigating Today's Turbulent Economy

If your competition isn't enough of a concern for you, add in the effects of today's economic climate. In the face of rising costs and fickle consumers, most U.S. businesses are buckling down and looking for ways to cut costs and increase their bottom line. The reseller channel is no different. While you might not be able to single-handedly alter the economy, there are some things you can do to cushion its impact on your business. In the book All About Earnings: 100 Ways to Profit in Any Economy (Capital Ideas for Business & Personal Development), Barry Schimel and Gary Kravitz present a number of ideas you might find useful.

For instance, as a cost-cutting measure, consider sub-leasing any unused office space. On that note, you might want to consider purchasing equipment and real estate rather than leasing it. Also, now is the time to take a close look at your telephone bill for errors. Not only do some research groups estimate that 70% of all phone bills contain errors, but you might find that unused fax or telephone lines can be canceled. A quick Web search will provide you with pages of businesses specializing in finding phone bill errors. Another idea is to create an employee incentive program aimed at generating cost-reducing ideas. Your employees not only are smart people with great ideas, they might better accept any cost-cutting changes inspired by them rather than management.

This is one of my favorites: For at least several months, sign all expense checks yourself (rather than having the receptionist rubber—stamp them), and seek to eliminate unnecessary items. In my VAR days, it wasn't until finances got tight that we started looking closely at the items for which we were cutting checks. We discovered that unused cell phone lines and travel expenses were unnecessarily costing us hundreds of dollars a month.

Finally, Schimel and Kravitz recommend that businesses secure two lines of credit at different banks, before the funds are actually needed. This one also resonates with me. We took pride in our fiscal well-being and never had the need for a line of credit. However, when our coffers drained and we needed credit, we weren't in a position to make it happen in the time frame we needed.

Maybe your business isn't yet feeling the effects of today's economy. Schimel and Kravitz's advice still can help. Someone once told me that business owners should examine their cash flow and estimate what a 10% decrease in sales would mean for their company. If that sort of decline would put your company in jeopardy, you might want to begin a close examination of your income and expenses now, before it's too late.