I remember reading somewhere that about 25% of businesses fail because of poor accounting. I have also blogged on AR about the importance of a GOOD accountant, paying taxes and also bottom line. We cannot control the market, we cannot control our sales, though with luck we can influence them. We can control what we spend.
In the last few years it was fairly easy to make money. If we had additional expenses, well with the market increasing 10-20% a year it was easy to cover a little here and a little extra expense there. Since most of us are sales people first accounting and or financial management do not come as second nature. BUT they are equally important with topics like customer service, negotiation, etc. Because IF you don't give them the credit they deserve then you won't be around long for customer service except perhaps at the poor farm or across the table as a server at a restaurant ( not panning wait staff folks...just an example).
My dad (a CPA) always told his clients it made no difference how much you brought in, what was important was what you paid out and ergo what you kept. It isn't as much fun as doing a deal or getting a listing. But it can be more financially rewarding. Of course it (management) is a tool that must be used in concert with other tools.
If you are in a downward market I suggest it is not the time to reduce advertising but it is a time to control advertising. Cut back where it is least effective add where it produces results. Review other expenses... can you reduce phone bills by being a little more judicious in your use... planning ahead and making one call work instead of three? What about internet... does it work for you or do you just think it does..is it a time waster that is costing when other media or approaches might be more effective. But to do these types of evaluations you need to know how much you spend monthly and yearly, you need to know where you business really comes from (tracking) and you need to know what things cost. The question is do you?
In the last 90 days i have reduced newspaper advertising by abut 75%, examined new calling plans for my phone and clipped another $200 per month, eliminated some internet services I did not think I was getting a big enough return from for $500. Plus about six other steps in all totalling about $2,000 per month after increasing spending in a couple very productive areas. With sales times being extended to 3-6 mos from 2-3 mos I (you) need to be able to operate longer between checks... cash flow is slower. therefore i have just added time by saving money...
This is only the surface... there are lots more that can be done. And by the way, my market is still hot... but I am concerned about three to six months from now.
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