JScott: Cut out the hooker expenses and you'll be fine!
Truthfully this is the best time to grow the business as there will be a glut of cheap talent and sites on the market within the next little while. People are starting to exit the business because all the easy money disappeared a long time ago. They've abandoned sites and watched their commission checks diminish to nothing and don't have the time or energy to continue.
Best way to cut expenses is to find cheaper ways of doing things. For instance I used to write all my own blog posts but posted a couple projects on Scriptlance and found a more economical solution in two freelancers. Now I can freelance out on bigger jobs and still earn a profit while having two people on the go.
Another way to cut your expenses is to barter. I have traded traffic, writing and marketing services for design, coding and ad spots. Takes up a bit of my time but if you find quality people it pays off.
Negotiate deals with your current hosting company. Find equivalent servers with cheaper pricing at a different company and ask them to match it or you're going to move over to them.
Ask for discounts! If someone you regularly pay $100 for the job, preach hard times and ask for the same service at $75.
There are tons of ways to bootstrap... you just have to be creative.
And if people think that the sales are going to dry up because of the economic downturn, that's not the reality in my opinion. There's going to be a lot of unemployed and underemployed guys looking for something to lift their spirits and $25 to join a porn site is just what the doctor ordered.
I am embracing the downturn and plan on making out like a bandit when the economists say its over. Be aggressive, dedicate to finding the best opportunities and follow through with them.
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