Reid, speaking at the union's annual meeting at Carisbrook last night, said the union had cut expenses to the bone, and more income needed to be generated.
The union had posted a $764,531 loss in the past year which both Reid and board chairman Ron Palenski described as disappointing.
Reid said the focus had to be on income generation, after income at the union had dropped by $1.1 million in the past four years.
"We have probably got to a level where expenses are at a minimum level and income is also at that minimum level too," he said.
The union had tried a few initiatives to raise funds which had not been successful as hoped, and had also been hit by the recession.
He warned both this year and next would be tough years financially for the union.
There will be no All Black tests next year and although there would be World Cup tests, not having an All Black test would cut into revenue for the union.
"The bottom line to the union from an All Black test is about $350,000 to the union.
There will be no test next year and from 2012 there will be a different income model for hosting tests.
It will still be worthwhile for the Otago union but not like it is now."
The selling of Carisbrook had been a success, considering the union had gone into negotiations with the council with a debt of $8 million, and had 87.5 % of that debt paid off.
He said the representative season was vitally important and the Otago team had to finish in the top seven.
He said some of the players really needed to stand up this year and make sure the side finished seventh or better.
Palenski reiterated the need to finish seventh, and said administrating rugby had become an increasingly complex business.
He said the priority for the union was to get as many people playing the game as possible but sometimes that did not fit with the business aspect of the professional game.
Carisbrook had been a millstone on the union, so selling it was a relief although short term it would be a pain.
He suggested some changes in the game had not helped the South.
"Night games, played for selfish business reasons, affect us more in the South than a lot of others.
"And that affects the quality of rugby which is forced on players."
Palenski said Reid had done a great job in what was the hardest job in sport south of the Waitaki River, and it was a frustrating and debilitating job at times.
An independent member of the board will be appointed later if Palenski did not seek re-appointment.
He said last night he would make his decision later this week.
University club member Monty Wright was made a life member of the union, while Clutha's Bill Beatty is the new president of the union.
No vice-president was nominated.
