New York City is the land of the small business owner. High commercial real estate prices have pushed out big retailers and created a flourishing small business economy. But where New York’s unique business landscape has created security for local entrepreneurs, it’s also created vulnerability.
As the financial hub of the world, New York City’s local economy is dependent on the business sector’s growth and stability. Unfortunately, the recession has deeply affected Wall Street. Financial services companies are slashing jobs, salaries and sending the City’s highest income earners into unemployment.
What Should Small Business Owners in New York City do?
Over the recessionary period, small business owners should prepare for lower sales and cut expenses. To manage fixed costs better, retail businesses that have a numerous credit card transactions should lower transaction costs. These fees can range anywhere from 2 to 2.5 percent for Visa and Master Card and up to 3 percent for American Express. Some banks are now offering entrepreneurs 1.5 percent. For example, an entrepreneur generating $100,000 transactions a month can save up to $1000 to $1500 a month.
Lease agreements and phone plans are other costs worth reassessing. Lower phone bills by changing to a VOIP (Voice over Internet Protocol), a great option for international businesses. As vacancies increase, renegotiate your lease agreement – especially if you’re the anchor tenant of the property.
During these tough times, it is critical for small businesses to recognize the economic downturn and identify potential cost cutting opportunities as well as important growth opportunities.
For information on how to leverage the recession to grow your business, check out this article in our recent newsletter: “It’s a Buyer’s Market”