Anything can and should be renegotiated in todays down economy. Do it.

We are in a meltdown. Revenues are plummeting, costs are high, based on yesterdays economy when it was boom time. Clearly much focus for the individual business owner is aimed at internal adjustments lowering overhead, reducing payroll, and cutting expenditures for marketing and other line items. This is appropriate and expected. However to do the job thoroughly and effectively, we must look at every expense item not just the ones that are easy to control.

For example your lease. Its a contract, its fixed and it appears to be one of the overhead items that cannot be adjusted.

Payroll, its always a major expense line item.

Cost of goods. Typically viewed as basically untouchable, it is what it is.

Leases of equipment, cars, etc. presumably fixed, controlled by contract.

Service contracts for whatever.

EVERYTHING YOU SPEND MONEY ON IS NOW NEGOTIABLE!!!

The reason is obvious, everyone wants to keep the business flowing.Everyone is tied to the down economy one way or another. Everyone is now willing to renegotiate to preserve business, something is better than nothing is the basis for this theory. Since everyone is experiencing the downturn, losing customers steadily, experiencing reduced revenue from every imaginable source, it is now the ‘economies fault’ not your own problem.

This opens the door for re-negotiating anything, everything. Not doing it is not understanding the nature of the changes we are experiencing. The changes are not temporary they are permanent. the economy we now have is what we will be experiencing for many years to come. In fact we have not yet hit bottom so we have more decline head of us, more reduced revenues more lost business.

The Christmas fourth quarter, so important to many businesses, will not be good, or better stated will be based on a new and different economy that is far less powerful than what we have become used to over the last ten years.

Its a permanent reduction of sales, revenue and profitability and thus your cost structure must be adjusted accordingly.

Call your landlord and negotiate a lease reduction or leave, yes you are breaking a contract but this is a necessary cost of long term survival.

Look at your payroll, reduce payroll and add incentives for achieving greater productivity, eliminate overtime and increase productivity.

Renegotiate your leases or return the equipment and either release or purchase.

There are many ways to accomplish these goals. Make no assumptions. its a new world and a new economy. Everything is negotiable,  any contract can be broken safely , successfully and cost efficiently. Its a matter of strategy.

Its not just about cutting some costs, its about cutting all your costs, none are immune from this process…if you want to survive in this down economy, our new world.

Call me if you need help, Call Norm he will arrange a no obligation teleconference. 413-584-2581.