Your business doesn’t have to fail, or even struggle. This is a great time for a business to shine. But you will have to face some hard truths about yourself and your circumstances. And you’re going to need to be brutally honest with yourself, your workers, your family and your vendors.
1) If you can’t pay for a product or service –
- a)Don’t buy it!
- b)Tell them up front and see if you can work out terms.
- c)Offer a trade in products or services you have.
- d)Look for a barter club
When you engage in barter, it’s still taxable. Be sure you book all the trades.
2) It’s time to re-evaluate employees – when you have staff
- a)Are your family employees bringing the company down? Do they do a sloppy job that other workers have to clean up or get blamed for? Dump the family members and keep morale high.
- b)Do you have ‘pity employees’? Do you have employees you don’t have the heart to fire because they are members of your community – but they do such a bad job you have to spend extra time fixing their work? If they aren’t responsible enough or focused on your business enough to get it right after all this time, it’s time to give yourself a break. Let them go.
- c)Are you re-doing the work of employees? Even in large corporations, I have met managers who kept staff on who were incompetent. They’d stay nights to review the person’s work and then re-do it before morning. Are you doing something that stupid? Dump the jerk! Get some sleep.
- d)If you must cut back staff – consider job-sharing. You have terrific employees who all do a good job. But you can’t afford to keep them all. Don’t lay-off by seniority. Hold a meeting and see if your staff is willing to job-share – or if one or two of them might easily be able to get new work quickly. Include them in the decision – and they might come back when business gets better.
- e)Offer everyone a pay cut – in exchange for one paid day a month off – or more flexible scheduling. Sometimes, getting to keep your job, even at lower pay – and getting a personal day or two can be a real stress-reliever.
- f)Cut employment costs. Have you put in a cafeteria plan – medical/child-care expenses pre-tax? It will cost a bit to administer. But the savings in payroll taxes will way more than offset admin costs. Raise for employees and cost-cutting for boss. Most payroll services can help you set this up.
3) Costs – you already know how to cut costs, right? Or do you?
- a)Evaluate/change suppliers – based on service and cost. For instance, we just dumped out fulfillment house for www.homebusinesstaxcuts.com. Among other problems, they could not get it through their heads that we weren’t going to pay variable UPS or FedEx rates ($15.00 – $30.00) to ship to different parts of the country, when the USPS offers a flat rate of about $10.00. (Besides, in this economy, who says, “our way or the highway!” – figuratively speaking, of course?) The great news is, not only did we just find 3 excellent fulfillment houses that would work with us – their services ALL cost about 50% less!
- b)Do you really need to buy that? Can you substitute something less costly – with similar quality. Quite often, especially today, you can find used equipment, furniture or tools or… things that are practically new. Shop around and ask your suppliers. Many offer refurbished goods with warranties. Shop at office supply houses like Quill.com who always have great deals. (We needed to get the HP fax – original cost $700 about 10 years ago – machine serviced. Our repair fellow seems to have gone out of business. We found a $100 HP copier/fax/printer/scanner on sale at Quill. With coupons and free shipping, it cost less than $30. OK…so the extra toner and other supplies we needed anyway brought the total order up to $137 – but…they included a tin of Mrs. Fields cookies!)
4) Advertising/PR:
- a)Share costs – do joint/piggyback advertising with a related business – For instance, Tom Buck, CPA recorded a set of CDs to help business-people deal with their tax issues. It’s quite a good resource. So, I did a custom version of my 100% Home Business Tax Cuts, re-arranging my topics to match the order of his CD. We’ve packaged them together. And we’ll be marketing them together. (You’ll be getting information about that shortly – or just drop by Tom Buck’s website to order the set.
- b)Do trade agreements with the local radio/tv station. I used to do billing for one of the hottest radio stations in Southern California. You’d be surprised to learn that many major advertisers never pay a dime. Instead, Winchells brought us donuts every week – and made some available for on-air prizes. A major florist filled each office with flowers every Friday – and made some available for on-air prizes. You’re getting the idea.
- c)Get a fundraiser started locally for a charity that helps folks who are out of work or need fundamental things like food and shelter. Not only will you help your community, you’ll also get a lot of free press. And it’s amazing how much fun this can be – and how much it builds morale around the office.
5) Increase sales
- a)find out what your clients/customers really need right now that you can provide. This is a good time to dump product/service lines no one really wants – and enhance lines they do. Who knows, you might find that you can build a whole new business line or direction by listening to your clients’ needs.
- b)provide terms for them – or offer them trades if they can’t pay. (See barter notes in Tip 1.) Just as you may need help paying your bills, it’s time to cut your clients some slack too. Some will stiff you. It’s true. There are some jerks out there – and you’ll know who not to work with again. MOST of your clients/customers will bend over backwards to make you whole, even if they ultimately file bankruptcy – and even if it takes them decades. Over the decades, in times of trouble, I’ve adopted this policy. Most people came through – and are still friends and clients. Some…well, you knew even at the beginning they had no ethics. So what can you expect? Help the honorable folks. And let your conscience guide you on the dishonorable folks.
- c)See if you can help your clients/customers increase their sales or save their accounts receivable. You have your own set of perspectives, contacts, and experiences. Sometimes, bringing fresh eyes to look at your customers’ businesses can generate wonderful ideas on how to increase their sales or – how to collect them.
- d)Accept credit cards – PayPal is easy to set up and very low cost. With everyone low on cash, you really should be accepting credit cards. Your customers/clients are more apt to pay you now, knowing they can pay the card over time. In fact, PayPal is much cheaper than your traditional merchant account. If you set up the minimum service, there are no monthly fees. And they collect a small percentage of each sale. Also better than a merchant account, the charge is directly associated with each sale. There are no mystery charges. AND if you refund someone’s money, you don’t get ANY charges – not a percentage of the original purchase – or a percentage of the refund – and there are no additional transaction fees. (Have you ever tried to reconcile a merchant account statement with a couple of hundred charges? Do you even know if you’re being overcharged by the banks?)
- Ask TaxMama :: Where taxes are fun and answers are free
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www.TaxQuips.com :: The number ONE free tax podcast online
- Quill.com :: For low cost office supplies
- Tom Buck CPA :: Tax Power CDs
- PayPal :: Better than a merchant account – and costs much, much less!
