Page 18 - Trading #101 Course – Part THREE: SETTING UP YOUR BUSINESS – www.traderscoach.com

TRADING #101 COURSE – PART THREE: SETTING UP YOUR BUSINESS – WWW.TRADERSCOACH.COM

Reduce Expenses and Increase Revenue

Any successful small business owner will tell you that the secret to success is to always
be looking for new ways to reduce expenses and increase revenue. It is a constant,
ongoing process that never ends. It requires a creative mind-set, since there are always
new ways to create efficiencies that save money, especially with new and emerging
technology at our finger tips.

In addition to efficiency, there are also ways to just “do without” that are useful to
implement. If it comes down to the possibility of closing your shop or instead cutting
some non-essential items, what are you going to do? You betcha’, get rid of the fat and
cut anything you don’t absolutely need.

Make the hard choices earlier rather than later. The earlier you make them; the more
positive impact you will benefit from the effect they will have in the long run. Doing too
little too late is a sad situation, since there are times when a business could have been
saved if more had been done sooner. Don’t fall prey to that mistake.

In the end, though, it is all about the revenue.

You’ve also got to keep your eye on the revenue and keep your eye on the ball. Donald
Trump is quoted as saying that when one of his enterprises went bankrupt in 1991, it
was because he took his eye off the ball. That is a luxury a business person cannot
afford. Diligence is the key.

How to Reduce Expenses

There are a variety of ways to cut expenses, some of them painful, to be sure, and then
some more creative ways that just require a bit of ingenuity. Best that you do a little of
both and strive to be lean and mean, even in times of prosperity.

For example, take a page from the book of Sam Walton, who founded Wal-Mart in
1962; he walked the walk and talked the talk of a lean, mean discount machine. His top
executives had to stay in budget motels when on business travel, because his mind-set
was all about stripping down costs to the bare minimum – even for the big kahunas.

We can take another useful example of cost cutting and reducing expenses from the
story of American Airlines back in 2003 when they it was attempting to avoid
bankruptcy. The airline took the usual obvious measures, such as laying off personnel
and implementing lower salaries for pilots.

What interests me more about American Airlines is its uniquely innovative ground-
breaking ideas, such as getting rid of magazines on all flights, dumping all the heavy
stainless-steel coffee machines for brewing coffee, getting guard dogs instead of paying

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