In response to a state budget deficit, the University of Minnesota Extension restructured its field staff, establishing a new regional and county delivery system, shifting all supervision of field staff to campus faculty, and encouraging greater field staff specialization, program focus, and entrepreneurial efforts. Nine economic concepts and numerous business principles influenced the creation of the new model. This article outlines the problems facing Extension in Minnesota as it reacted to budget cuts and the nine economic principles that helped Extension sort out the alternative courses of action and their consequences. By applying these principles, Extension was able to maintain a higher number of field staff than it might have otherwise, and effectiveness has in some respects increased despite reductions in the number of personnel.