| Friday, November 22, 2024 | CONTACT |
Add $1,000 or More to Your Business's bottom Line in 30 Days!
Reducing Other Expenses
There are probably dozens of other areas within your operation where you might be able to reduce expenses if you think about it. Here are a few you might consider:
- Utilities: Are your heat, air conditioning, and lights on timers so they shut off or go into econo mode when you're not open? Would drapes, blinds, or reflective film help lower you heating and A.C. costs?
- Laundry: Could you eliminate your laundry service for towels, and instead install a stacking washer/dryer in your store, or take them home to be washed?
- Janitorial: If you are using a janitorial service, could you reduce the cost if they cleaned less nights a week, and your employees did the cleaning on those nights instead? Would it be cheaper to eliminate your janitorial service all together, and hire a minimum wage employee to do the janitorial work?
- Trash Disposal: Does you garbage company offer free recycling, and if so, are you taking advantage of it? (You can probably cut down on the number of weekly trash pick-ups if you get all the recyclables out of your garbage.)
- Phone/Cable: Are your employees making personal phone calls from your business phone? – if so, implement a no personal phone call policy. Do you really need a hard-line phone, or can you do everything from your cell; if so, eliminated your hard-line service.
- Employee Meals: Are your employees eating up your profits, and worse yet, feeding them to their friends and family as well? Make sure you have a set policy for employee consumption, and that they understand that giving product away to their friends and family, without your permission, is forbidden.
- Bank Charges and Credit Card Fees: If a large percentage of your sales are being paid for with credit cards, then the fees associated with processing those transactions can be significant. Shop banks for the best credit card rates.
Ask for a rent reduction
If your landlord hasn't offered to lower you rent during this recession, you should ask them to do so. The economic situation over the last two years has caused thousands of businesses to fail. As a result, almost any shopping center you visit today will have spaces available for lease. Worse yet, because money is still extremely tight, many who would like to start a business cannot find any financing. This means that commercial property owners are facing challenges in finding tenants to replace the ones who have left. Cutting your rent will probably be a more agreeable proposition to your landlord, than having you shut your doors, creating yet another vacancy for them to fill.
I know that approaching your landlord on this subject might seem a bit intimidating, but what do you have to loose? The worst thing that can happen is they will say no! But, there is also a very good chance they might say yes. You won't know if you don't ask! Make an appointment to have a meeting with your landlord, and say something like the following:
"Mr. landlord, I asked to have this meeting because I wanted you to know that I am really struggling right now to keep my doors open (whether you are or not). This recession has really put a crimp in my business. I've aggressively cut costs and have launched multiple promotions to try to increase business, but it hasn't been enough to offset the business I've lost (you want to let them know you have tried everything you could think of, before coming to them for a rent reduction). I know you don't want to loose me as a tenant, because it will only create another vacancy for you to fill, and in this economy, it might be difficult to find someone who has the financing to open a new business in my space. Also, I'm sure you are aware that my business draws hundreds of people to this shopping center each day, which also helps fuel your other tenant's sales. So, I'm appealing for your help. I'm asking you for a temporary rent reduction to help me make it through until things improve. Will you help me?"
Similar to the request we made to our purveyors for lower prices, an honest appeal for help will work better than making demands. Also, did you notice that I have tried to play off of the concerns and fears that I know the landlord must be experiencing? (1. it might be difficult to find a renter for my space if I leave, and 2. if I shut my doors you will loose the hundreds of people that come to this shopping center each day to patronize my business, and that loss of customers will certainly effect your other tenant's sales, possibly forcing some of them to shut their doors as well).
Be prepared with some numbers as to what you would like. You don't want to be caught off guard when your landlord say - "OK, so what are you thinking, what kind of rent reduction are you looking for?" Be sure to throw out an initial request that far exceeds what you actually want. It is likely that you will have to negotiate down from your initial request, so you want to ask for more than you expect so that when negotiations are completed, you might be near what you actually wanted. Be bold, ask your landlord for a 50% rent reduction for 3 years. They'll probably laugh at you, but if you end up with a 25% rent reduction for the next 18 months, I'm sure you'll probably be happy to take it.