The past few years have sent virtually all markets on a roller-coaster. From buble bursts to credit downgades, it has not been easy to see much of any light at the end of what has been way too long of a tunnel. We've developed some techniques to relieve some of your corporate real estate and other related expenses. A couple of them may not be quite so groundbreaking, but you know what they say about what's right under your nose. Here are our first suggestions:
Trim the Fat
Smart business executives are always facing the pressures of trying to make their company “leaner” and more efficient. In times of economic turmoil, the immediate response is to downsize their staff and cut their biggest expense: payroll. But before you make the cut, consider the time it took to hone your top employees. You can replace a computer within 24hrs, but you can’t replace someone with 10 years experience and the “tribal knowledge” of working in your company in less than 10 years.
Employees with intimate knowledge of the nuances in your business are what keep everything running like a well-oiled machine.
Try to avoid cutting into the muscle of your company— instead focus on the excess fat of corporate waste.
Reevaluate Your Third Biggest Expense
Corporate real estate is an expense often overlooked but typically ranked 3rd in its magnitude on the corporate expense list.
90% of corporations today have over-market lease prices because the recession has driven down rental rates and most real estate leases have a commitment of 5-10 years. On average, leases signed pre-2008 have over-market values typically in the 30-40% range.
This is low hanging fruit easily plucked by the astute CFO looking to trim the fat.
Click here to learn more about the author.
Or for some more tips, here's Combat Commercial Real Estate Market Turmoil Part 2 & Part 3
