One of the realities of running a small company is that there are just so many places one can cut costs during times like these. For many, salaries and rent are the two big categories.
Many entrepreneurs I work with are already taking steps to cut payroll costs through cutting back on the number of employees, using more independent contractors, skipping their own paychecks when cash is tight, and asking everyone to take a pay cut.
But, how do you help cut the cost of your space?
One option is to try and renegotiate your lease with your landlord. Since times are getting tougher in the commercial real estate market, you may find the landlord willing to take less rather than risk having empty space.
Another option for some is to do what so many college graduates seem to be doing right now — when times get tough, move back home.
Just as running a business from home is a great way to keep overhead low when starting a business, it can also be a way to keep a business alive during the recession.
Raymund Flandez has an article at the Wall Street Journal about this growing trend:
In February, after 12 years in a downtown La Jolla, Calif., storefront, Brett
and Kimberly Buffington packed up their children’s clothing boutique, Eurochild
LLC, and moved it into their home.“Business just stopped on a dime” 18 months ago, Mr. Buffington says, and he
and his wife were unable to renegotiate their $7,000-a-month rent.Working at home allows the couple to save $12,000 a month in rent and other
overhead costs and focus on revamping EuroChild’s Web site to attract new
customers. “You don’t have overhead, you don’t have to manage employees, you
don’t have to keep the store clean — all the stuff that comes along with
running a retail business,” Mr. Buffington says.
If you do decide to homesource your business, keep in mind some of the tips I offered in a recent post about home-based businesses.