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How to Tighten Your Belt Without Breaking Your Back
Cutting Business Expenses While Staying Healthy

The economic downturn is causing small business owners everywhere to think about how to survive. Consumer spending is already reduced and prognisticators have been predicting a disappointing Holiday buying season (source). With customers concerned about growing unemployment and already accustomed to seeing large discounts, stores may not be able to lower prices enough to spur buying.

With anticipated revenues down, costs may have to be cut for small retailers to survive. So where do you cut to improve your business' health instead of killing it? Many times managers will cut the wrong costs or cut too deeply and hurt the company's chances of survival.

Business expenses can be broken down into some basic categories: Cost of goods sold, labor, facility rent or mortgage payment, utilities, office supplies, technology, advertising, and taxes.

Cost Of Goods Sold: If you are selling less, you can get away with buying less, so that reduces your cost. But inventory that sits on the shelf costs you, too, so you still need to move product out the door.

Labor: Employees are always one of the larger expenses of any business, so many businesses will lay off employees or not replace retiring employees to cut their costs. The problem to avoid when considering staff reductions is that trained, productive employees are very expensive to replace, once the economy recovers and things are booming again. Melissa Peterman, in her article "10 Ways to Cut Costs Without Having to Cut People From Your Payroll", advises skipping bonuses rather than letting valued employees go. Otherwise they may be lost to you forever. (source). Peterman also suggests hiring interns to fill vacancies instead of more expensive older talent.

Facility Rent or Mortgage: If you are in a lease or own your building there may not be anything you can do about your monthly committment, however, you might be able to scale back a planned remodelling project to save cash. Don't defer vital maintenance, but you may be able to go another year without replacing the carpet or changing the wall color.

Utilities: This is an area where it may not appear that you can change much, but pennies do add up to dollars and it may be that being more careful with lights and water usage could add up to significant savings over the year. (source)

Office Supplies: According to the-cost-reduction-consultant.com "It is tempting to think of these kinds of expenses as not being large enough to be eligible for reduction. But even if that was true, they are a great place to start teaching the company to be more aware of controlling costs."

Technology: If you're a techno-geek, it's almost mandatory to spend money on technology to get the latest computer or screen or software upgrade, but if you can defer upgrading hardware and software for a few months or a year, the savings could amount to thousands. Evaluate (or counsel with a knowledgable friend) when it is vital to upgrade and when you can wait.

Advertising: This is the category most often cut first when it's time to belt-tighten. Advertising is not as mandatory as your rent, but the saying is "out of site, out of mind" so you need to make sure people remember you. "There is a fine balance to strike here," says Isla Campbell (source), who writes for a digital marketing agency, "since cutting back too far on advertising will result in a loss of customers as well. But, you should regularly go through your various advertising methods to see how well they are performing, and make sure you pour your budget into the best places." You may have to be creative and find unconventional ways to promote your business. E-mail marketing and carefully placed web site banner advertising has been shown to outperform many traditional media in terms of return on investment.

One advantage that small businesses have over large companies which are seen struggling on the front pages of newspapers right now is their agility. Without layers of bureacracy and "legacy costs", small businesses can make decisions and implement them with lightning speed that leaves larger companies in the dust.

Quick Industry News

Gift Industry Associations Meet in Florida

The Gift Sales Managers Association (GSMA) and Gift and Home Trade Association (GHTA) had consecutive conventions in Sanibel Island, Florida, November 19 through 22. The annual meetings were attended by about 200 people each. The membership of GSMA is comprised of sales managers for gift industry vendors. GHTA (formerly United Sales Agents - USA) members are Sales Rep Agencies.

The Keynote at GHTA was given by Terry Jones, founder of Travelocity.com. "Prospering in the Age of Globalization and the Internet" was his topic. OmegaNet's President Toni Ivey spoke at both conventions concerning communicating with customers over the Internet.

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Deco Breeze® Introduces "Cool" Collectibles with New Figurine Fans

San Diego, Ca. - Deco Breeze®, a leading manufacturer of decorative floor and table top fans, is turning heads with the debut of a new, never-before-seen collection of functional Figurine Fans! Animal lovers, collectors and gift givers alike will enjoy the new decorative fans featuring eight designs in Cat, Dog, Rooster, Owl, Frog, Flowers, Turtle and Snail styles. The new Deco Breeze® collection of Figurine Fans will make its debut at the January 2009 Atlanta International Gift & Home Furnishings Market®.

Each Figurine Fan is artistically sculpted in beautifully colored ironwork and stands majestically on any table or desk. Measuring up to 23" inches in height, these unique decorative fans are made with top-quality 20 watt copper-spun motors and are ideal to make any personal space more comfortable. With its decorative appeal, a Figurine Fan can easily become a permanent part of any desk, vanity, bedroom, kitchen, bathroom or other personal space décor ensemble, adding a decorative dimension and making it easily accessible for frequent use. Suggested retail pricing is $85 each. (more)

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Peking Handicraft Introduces New Textiles Designed by Anna Maria Horner
Must-have designs to debut at January 2009 Atlanta Gift Show

San Francisco, Calif. -- Peking Handicraft, Inc., an international manufacturer and wholesaler of high quality home decor, tabletop and giftware items, introduces two new licensed collections designed by Anna Maria Horner: Cookbook and Sketchbook. These charming, new must-have collections combine Anna Maria's signature palette and whimsical floral designs with feminine trimming and bold detail. The chic collections offered exclusively by Peking Handicraft will debut at the January 2009 Atlanta International Gift & Home Furnishings Market. (more)

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Mud Pie Names Tim Roberts Visual Director

Atlanta, Ga. -- The award-wining international gift company, Mud Pie, announces the appointment of Tim Roberts as visual director, a newly created position on the product development team. In his role as visual director, Roberts will be responsible for the visual image of Mud Pie in the marketplace, including product presentation in the firm's permanent showrooms and temporary show booths, and online. He will also coordinate the visual aspect of all marketing tools and work with the sales team in developing sales tools.

"We are very excited about the energy Tim brings to the product development team," says Fred Pannek, vice president of product development. "With Tim on board, I'm confident Mud Pie will benefit from his experience in visual merchandising." (more)

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