Daniel Freund

Ben Franklin is credited with coining the phrase "a penny saved is a penny earned" and the corollary concept "by failing to prepare, you are preparing to fail." I venture that if you combine these axioms you arrive at a practical third truism: "planning to reduce expenses leads to greater profitability."

Here are some specific steps that our firm has implemented to reduce expenses:

1. If your current space is suitable renegotiate your lease when the real estate market favors tenants (now).

2. Use technology: Eliminate printing costs. Convert marketing materials, manuals, support documentation and other materials to electronic format and distribute via email and the Web. Transition away from email to well constructed Web site. Distribute brief (one page) quarterly sales newsletters. Use Web-based Flash media presentations. They are inexpensive to make and distribute. Get the client to do the work for you. Build good Web-based tools and eliminate double entry of information everywhere. Improve the process.

A lever and a wheel are better than hiring more strong backs!

3. Make a place for workers to eat. They want to save money and bring in their lunch and will take shorter breaks because they are not leaving to get food.

4. Pay attention to employees. Little perks like a dart board in the lunch room next to the microwave builds camaraderie.

5. Be sure every desk worker has a comfortable chair, a good personal computer and one or two or more good monitors. They spend all day with the PC, so it must be a very pleasing environment.

6. Automate as much of HR as possible including benefits enrollment and management. Implement Section 125 dependent care and medical reimbursement accounts. Employer and employee save taxes. In urban areas, use a Section 132 transportation account also.

7. Whenever possible, replace travel with Web seminars and conference calls. Pick trade shows carefully.

8. Be flexible and trusting but not foolish with employee requests for time off. Pool sick and vacation time into "paid time off." Permit remote working for those with online access when it is prudent - day care problems or inclement weather. Thus workers are not stressed with "special" situations and you earn their trust and cooperation when management needs some extra help.

9. Hire carefully. Employees are the greatest asset of any company. Manage your team with care and compassion.

10. Fire the bad clients. Some clients take too much handling and they truly are not profitable. Know when to call it quits.

11. Enjoy the good times and save your cash for the hard times. There are cycles. Be patient, careful, fair, frugal and grateful.