All Posts Tagged: budget

7 ideas for business owners looking to tackle costs

Michelle Di Gangi
Small Business Banking

Entrepreneurs and owners of small companies had some good news recently, as the Small Business Optimism Index rose to the second-highest level recorded in its 45-year history, according to the National Federation of Independent Business.

Woman small business owner on the phone at her desk & scanning her computer monitor.It’s an encouraging data point, for now. It’s also good to remember that prudent business owners don’t just plan for what is, but for what may be.

In the 10th year of an economic expansion, with the Federal Reserve responding to the strength in the economy by raising interest rates and signaling more rate hikes are in the future, the odds are that tailwinds will change into headwinds at some point. Our Chief Economist Scott Anderson has even called the expansion “long in the tooth” and suggested that a recession is possible in 2020.

Planning in advance for what to do when that happens should help position you to alter course quickly, rather than struggle to develop a plan. Imagine that you had added many items containing avocados to your restaurant’s menu, knowing how much diners loved them – only to be blindsided by the 125% increase in prices last summer. Suddenly, the need to cut costs loomed immediately ahead, as you took a loss on nearly every meal you served. Should you raise prices? Change your menu? Or have a plan to cut costs elsewhere?

Savvy business owners know that surviving and flourishing is all about keeping costs under control, regardless of the external business environment. But how do you evaluate your cost structure and decide what cuts are necessary?

Here are seven ideas for ways to cut costs:

  • If inflation risks are growing, small businesses should look for ways to lock in prices with any long-term vendors and build up a savings cushion for protection against increases in energy and commodity prices.
  • It may be time to revise your relationships with your employees, especially since states and municipalities are pushing for higher minimum wages. If salaries are your biggest cost, consider recruiting part-time or seasonal workers for peak periods; hire college students to give them work experience and a line on their resumes.
  • Never assume you’re always getting the best deal with your suppliers, but review your options – in price, reliability, and quality – regularly and leverage your loyalty to a supplier into even a small discount. This may ensure you get a small discount for paying bills promptly.
  • Little stuff matters. How much cloud storage space and broadband are you paying for? Do you have a TV in the workplace, and if so, why? Cut what you don’t really need. Hang on to even small receipts for tax time. Turn down the thermostat a few degrees. It all adds up.
  • Consider barter. You need a new website; do you know a website developer who needs their taxes done if you’re a tax attorney? Check out local barter exchanges when you need your office painted.
  • Healthcare for employees is a big cost. Partner with other companies; form a cooperative and buy insurance as a larger group. Benefits of this strategy vary by state: it may be less costly or may give your employees better options. If you add a wellness program, you may save more in insurance costs than the outlay on the program.
  • If you need to slash costs, really think out of the box. Do you need your own office? Co-working spaces, like those offered by WeWork, are one option. Or shift to telecommuting, which will save you rent, insurance, utilities, and even taxes. The bonus? Research shows employees often are more productive.

No business owner needs all of these strategies, but all should be available as weapons in your arsenal, to be used proactively or when things get tough. To be prepared is half the battle.

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Financial well-being checklist for the new graduate

Beth Hale
Posted by Beth Hale
Consumer Banking
Row of college graduates outside, dressed in their black caps & gowns.

There is nothing more worrisome than trying to figure out how to pay off college debt.

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A recipe for the millennials’ American Dream

Paul Appleton
Consumer Banking
Young couple pausing from their meal at a kitchen table to take a selfie.

It’s as if this generation took some of the classic elements of the American Dream and added several twists, building a whole new recipe.

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U.S. Outlook: Why 3.0% GDP growth looks like a long shot

Scott Anderson
Chief Economist
Graph showing recent dip in labor force growth.

President Trump talks about returning the United States to 3.0% GDP growth or better, and it’s baked into his FY 2018 budget plan to reach that milestone by 2021.

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U.S. Outlook: Where there is smoke, is there fire?

Scott Anderson
Chief Economist
Busy street view of US Capitol from a few blocks away.

There has been much activity in Washington unrelated to tax reform from congressional hearings on Russian entanglements to a delayed House vote on a replacement for the Affordable Care Act. Risks that the new administration and Congress could get side-tracked from their tax cut, infrastructure, and deregulation agenda are on the rise. For more on […]

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