As we all know, we have entered into a very disruptive time in our economy. There is more uncertainty now than we have experienced in many, many years. The only thing we really know is that, even if the economy stabilizes fairly quickly, there will be an impact on business for some period of time.

Prior to my becoming a partner with B2B CFO®, I started and ran a business in the printing/copying industry. I began the serious planning for starting this business during 2000 and, by the end of the summer of 2001, I had my financing in place, leased the space, begun the build-out, and had hired employees. Everything was in place to open in November.

And then 9/11 occurred.

I decided that I would continue with my plans to open, and did so just before Thanksgiving 2001. And, the opening went well.

But, the impact of 9/11 was far-reaching; companies – small, mid-sized, and large – reduced their marketing plans, their training programs and their workforces. In essence, they did whatever they could do to reduce their expenses to protect themselves. Looking back, this “holding back” lasted from 18 months to over two years, depending on the company.

I think we are in a very similar place right now.

So, what should you do right now?

The first thing to do is look at your expenses, and determine if this is the time to either cut those expenses or at least be prepared to “pull the trigger” on short notice if you need to do so.

The Nature of Expenses

Some expenses are discretionary and some are non-discretionary, at least in the near-term. Building rent and business insurance are probably non-discretionary, and you may not be in a position to change those payments. But difficult times call for extraordinary steps, and it may be just the right time to meet with your landlord to discuss possible options, including reducing your current rental payments or moving some of them to later periods to conserve cash flow. Particularly in this market, and if you are getting close to the end of the lease term, you may find that your landlord is willing to talk.

It is also in order to meet with your insurance broker to look at your coverage and determine if there should be changes that will reduce your cost. While a certain base level of insurance is needed, there may be some flexibility in terms of deductibles and types of coverage that could lead to a reduction in your costs. You may want to look into having multiple insurers bid on providing renewal coverage.

Cash is King to your suppliers. Talk with them about the opportunity to receive discounts for your prompt payment of invoices.

Cash is also King to you. Be sure to speak with customers before your invoices are due, and be sure that you are on the top of their list of vendors to pay.

Talk with your bank about “remote deposit capture” and stop putting off going to the bank to make those “small” deposits—with this feature, you deposit your checks each day, without ever leaving your office.

Take a close look at what you are spending for your technology infrastructure. With one client, we added up the real costs of occasionally using an outside consultant, and the true cost of an employee who was expected to spend a quarter of his time in this area (but was really spending close to 75%). By outsourcing these functions, and paying the full year fee up-front in return for getting 13 months of service, we actually reduced our overall IT costs and have a much better IT system in place.

Marketing expenses need to be examined. A general rule of thumb is that you have to “touch” your prospects five to seven times before they think of you when it’s time to consider buying your product. A cost-effective way to “touch” prospects is instituting a well-planned email-marketing program. You can easily reach people, professionally and routinely, to keep your company in front of them.

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These are just a few of the many expenses and opportunities you need to consider. While it’s always critical to understand the expenses that you incur, now is the best time to do so. You will probably be surprised at how much you can save by taking a close look at what you spend.