The One Percent Solution For Today’s Businesses

It should be obvious to all that business has changed from times past. The amount of layoffs, reduced income, and increased worry is taking its toll on all employers and employees. What can be done about this that is actually doable?
There is plenty that I have seen successfully done. The main thing is to start managing your business. The reason this looks daunting is that owners try to do too much too fast. You need to approach this in one percent increments and there are plenty of opportunities.
Examples of this that I have seen accomplished are:
1. Workers Compensation insurance. The rules changed this year in Ohio such that current Workers Compensation reductions are only 51% of your total. However, a PEO can give you up to a 65% reduction and usually will be able to compete with your payroll company.
2. Insurance. Your current company will not give you the discounts that are being currently offered to grow new business. A long time relationship with your insurance professional is very valuable. However, an independent insurance agent has access to multiple vendors and can offer alternatives to your current insurance. Have the new agent review your current insurance. I have seen vendors not have their buildings covered, have buildings listed incorrectly, have coverage taken away in the back of the policy, and just have certificates and not real insurance.
3. Payroll. Who does this for you? Most payroll companies do a great job. However, not all companies are equal, and some companies use the payroll to front their real business interests. I have seen payroll companies who also start Marketing Strategy offering retirement plans (401k) at enormous fees with next to no service. I have also seen accountants who will offer this service but will “bundle” the actual costs for this so you cannot tell what it is actually costing you.
4. Professionals. What exactly is your CPA, lawyer, banker, bookkeeper, or insurance agent actually providing you? Are they a part of your business or just someone you talk to semiannually or when they want to get paid? Do they use your printing, garage, or concierge business? Do they actively promote your business to the rest of their clients? Have they offered any help or advice in these tough times? Do they return your calls or better yet actually call you?
5. Employees. Do you have a problem employee? Why are you putting up with that? There are plenty of highly if not overqualified people out there who would leap at the chance to work. Stop with the excuses of they will leave me when the economy turns around. Historically this is not the case. They remember who helped them during a very trying time, and they will likely stay. Employees who see their fellow employees abused by an employer will remember that also.
6. Rent. Have you discussed reducing the rent for you store, office, or warehouse? Guess how much that empty storefront is bringing in for revenue. Nothing. Some rent money is better than no rent money. Ask the question.
7. Loans. Got a business loan? Have you talked to the bank about refinancing? No? What have you got you to lose except some increased cash flow. The SBA has even allowed refinancing of their loans at a lower interest rate for the first time since inception of the program. You have to go to your bank and ask for this refinancing. If they refuse (and not all banks are doing this) go to another bank. There are plenty of banks who want your small business business.
8. Yourself. Take a long look in the mirror and be honest with yourself. Are you really trying to go forward in your business or are you yearning for the good old days? Pay cuts are hard to swallow for yourself Are Student Loans Variable Or Fixed and your employees. Stopping matching to your retirement plan is also tough. Letting employees go (except for the problems) is tough. Get tough. But, and it is a very big but, get tough with yourself first.
All of these steps will only reduce your required key in the door outlays by 1 to 1.5 percent, but together it will add up to 10 to 15 percent. This should be enough to allow you to get by for the next year. Consumer spending is the only way we are going to recover in this economy, and it will take a while for that confidence to recover.
I have had this exact same conversation with many business owners, most of whom are still in business.

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