A Guide to Forward-Thinking Frugality for Small and Mid-Size Businesses
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A guide to forward-thinking frugality for small and mid-size businesses Fall 2017, Volume 2 in the BridgeTower Media series of guides for small and mid-sized businesses A supplement to: Arizona Capitol Times | Central Penn Business Journal | Charleston Regional Business Journal Columbia Regional Business Report | Daily Journal of Commerce | Finance & Commerce GSA Business Report | Idaho Business Review | Lehigh Valley Business | Long Island Business News Massachusetts Lawyers Weekly | Michigan Lawyers Weekly | Minnesota Lawyer | Missouri Lawyers Weekly NJBIZ | New Orleans CityBusiness | North Carolina Lawyers Weekly | Rhode Island Lawyers Weekly Rochester Business Journal | South Carolina Lawyers Weekly | e Daily Record | e Daily Reporter e Journal Record | e Mecklenburg Times | Virginia Lawyers Weekly | Wisconsin Law Journal NATIONAL FOCUS SECTIONS UPCOMING Throughout 2017 BridgeTower Media editors will take a NATIONAL close look at how market dynamics, legislation, competitive trends & new technologies in these sectors affect the RELEASES business & practices for its more than 300,000 business, IN 2017 legal & construction readers across the U.S. BridgeTower’s 27 print & digital publications cover legal, financial, real estate & government news in Employment more than 20 different markets. Our portfolio includes September 18 Our subscribers are affluent, influential publications well-educated decision makers. such as The Daily Record, Massachusetts Lawyers Weekly, Virginia Lawyers Health Care BridgeTower Media properties Weekly, New Orleans October 23 around the country provide CityBusiness & NJBIZ. a dedicated readership with unprecedented penetration into key national markets: Cybersecurity √ Over 80,000 print subscribers November 20 √ 300,000 readers √ Over 3,000,000 monthly page views Wealth √ Over 800,000 monthly unique website visitors Management √ Newsletter distribution to 150,000 December 11 Participation opportunities include print & digital advertising, native content & SMB Best webinar sponsorships. Practices Guide Contact Jon Babicz at 973-699-7061 or [email protected] December 2017 or your local BridgeTower publication sales representative to learn more. Achieving Fiscal Fitness hether you’re a small business or a Fortune 500 company, at some point we all have to answer one of the most common, uncomfortable questions in business: How can I Wcut costs? As a rule, the question is most oen prompted by external pressure—from shareholders, private investors, vendors, etc. If you’re a family business, where personal and business expenses may intermingle, the prospect of sending a child to college or paying for unforeseen medical expenses may function as the impetus. In other instances, a balance sheet review might be caused by a surprisingly high tax bill or, worse, a data breach by cyber criminals. But whatever leads you to think more frugally, cost cutting is oen done in haste, without regard for the long-term implications. In a worst-case scenario, the business survives in the short term only to lose big in the long term. Some costs, like full-time employees, are a natural place to look, based on the expensive “carry- on” fees of healthcare and benets (assuming you oer them). Other costs, like rent and building maintenance, are common targets in part because they’re easy to quantify. But there are several other expenses that busy SMB owners don’t naturally scrutinize, areas where there may be sizable cost eciencies. It’s impossible to know how many of our subscribers—most of them small and medium-sized businesses—are wrestling with this question right now. What we do know is there are a multitude of ways to operate more eciently, and there’s never a wrong time to consider these options. So with the objective of helping our customers think strategically about their expenses, we’ve put together an insightful, actionable compendium of stories and ideas to help improve the balance sheet. We recognize many of these ideas are disruptive, and may require stepping out of your comfort zone, but companies who are willing to invest in the analysis are likely to see some ROI. As always, we welcome your feedback, and as one of our follow-up actions we’re hosting a contest to determine what are the most creative ways to save money. All readers are eligible, the submission process is painless, and most importantly, we’re oering monetary prizes to the Top 3 winners to help you improve your own bottom line. For more information, go to http://bit.ly/dcscontest. Adam Reinebach President and CEO BridgeTower Media 3 | Disruptive Cost Savings Two pieces of the puzzle— oering clients lower rates and employees relatively high compensation—are essential to the rm’s business model, according to managing partner Alan Tarter Managing Partner Tarter Krinsky & Drogin LLP The Cost Variable How a New York City-based law firm keeps its costs under control By Chris O’Leary same services as a larger firm but at space. The more staff you have, the ing in satellite offices outside of New a lower cost.” more revenue you can produce.” York, which have lower rents (it has Tarter Krinsky & Drogin LLP has A common New York standard to keep its balance to survive in the Finding new ways to reduce costs a Princeton, New Jersey office, for ultra-competitive New York City becomes an essential strategy. “If is that each attorney needs roughly example). It’s a creative way for the legal industry. The law firm wants to overhead starts to go up, compensa- 750 square feet to 1,000 square feet firm to keep expanding staff while offer lower rates than its larger com- tion has to go down, or rates have to of office space. Tarter Krinsky & not further expanding its Manhattan petitors to attract new business. It go up,” Tarter says. “We don’t want Drogin cut that ratio in half, allo- office. So far, the firm’s off-site work- needs compensation levels to stay on either of the two to happen. That cating usually 500 square feet to 525 ers are relatively few. “It’s something par with those of its rivals, to ensure means we have to control overhead, square feet of space per lawyer. That we’re testing to see how it works,” he it retains top talent. And its overhead and control costs.” way, two attorneys work in the space says. “It’s another way to reduce your needs to stay under control while the that another firm would have allo- real estate costs—having paralegals Conquering real estate firm operates in a city whose com- cated for one. Before it moved into and attorneys working from home or Given its Manhattan office mercial real estate market is known its current location, the firm divided in other areas that have lower-cost location, keeping real estate costs for exorbitant rents. the space’s existing offices to achieve situations.” down is a major priority for Tarter Two pieces of the puzzle—offer- this goal, putting up new walls to Given the improvements in com- Krinsky & Drogin. Real estate-relat- ing clients lower rates and employees create more offices. munications technology, whether ed expenses are its second-highest relatively high compensation—are And when the firm expanded to Skype, FaceTime or other web-based expense after making payroll. essential to the firm’s business mod- another floor of its building, its land- programs, the need for all attorneys When moving to its current office el, according to managing partner lord offered to install a stairwell that to work in the same building di- space on Broadway about 10 years Alan Tarter. “We’re a full-service would link the floors, thus letting minishes. As Tarter says, “the same ago, the firm locked in its rent for firm, but our rate structure is around employees avoid having to use the phone that would otherwise ring in a long-term period. This protects 35% less than the average large firm,” elevator. It was a tempting offer, but New York will ring in these satellite them against the price volatility of he says. “But we have all the resourc- the firm declined. “We were con- offices instead.” es and practice areas of a large law the New York commercial real estate cerned that we’d lose too much space firm. Our rate structure is part of market. on the two floors if we put in an Knowing when to outsource our value proposition.” More importantly, the firm internal stairwell,” Tarter says. “This Another way Tarter Krinsky & That leaves overhead as the worked to maximize its office space. would have in essence increased the Drogin reduces costs is through its variable the firm can control. “We’re “We wanted to get the most appro- costs of space per attorney.” judicious use of outsourcing. “When very careful with overhead because priate ratio of attorneys per square Now Tarter Krinsky & Drogin is we were smaller, we had our ac- we want to maintain our rate struc- foot that we could get into the considering further steps to cut real counting department and a control- ture. We feel like it’s a major compet- space,” Tarter says. “That allows you estate costs, such as having more of ler. We had a need for a CFO, but not itive advantage for us to provide the to be more profitable within your its attorneys work remotely, or work- a full-time one,” Tarter says. So the 4 | Disruptive Cost Savings firm outsourced the CFO function to & Drogin prefers to have that work now, and certain programs that are around.” And if someone has to pull an official who “spent about 20% of done under its own roof. maintained in our office,” he says. a work-weekend at the office, they his time on our firm,” he adds. “That Further, improvements in tech- “But I think the trend is definite- can manually adjust the thermostat allowed us to get the benefit of a nology is enabling the firm to bring ly moving towards the cloud.