When the funds are running low, or a business is in ‘trim the fat’ mode, it’s common that small business owners just look at what they perceive are the easy things to cut. Some of these common business budget cuts can really damage your business and long term will not actually solve any problems.
Let’s take a look at what NOT to cut from your business budget:
It’s a common line item that people figure they can just cut. Sure, much of our marketing can easily be ‘turned off’ easily, so sadly some businesses do. To me it’s somewhat obvious; if you cut your marketing out, you stop getting enquiries and market share, sales drop and there is even less profit. I know this is harsh to say, but if you want to go out of business, then just close the doors and don’t make it a long, drawn-out and painful process.
Now, having said that, reviewing what is working or not, and tweaking your marketing activities and trimming what doesn’t work is absolutely a great idea. I regularly do this with my business coaching clients (even if as a business they are doing really well). I figure if they are spending X dollars on something which doesn’t work, and move that X dollars to something which will work really well, you’re going to get better results. If you want more business keep the business and if that extra work is too much, then trim a little.
This is another easy line item to stop spending. Last Christmas I coached my business clients to not hold back on Christmas celebrations, gifts and bonuses. Staff had experienced a tough and stressful year as well and when we value our team, our team stay and are loyal. Stop training your team and service drops, as will eventually staff retention. I’ve said it so many times, it costs sooo much more to replace a team member than to retain one. I know employers have that fear that if they spend money training their staff, that staff member will take that training and go. And yes, they could. But if you don’t provide them with some ‘nourishment’ (appreciation, training, opportunity) then they will go anyway. When you find someone great, value them.
Even if you are a budget service provider (or product) there is a certain expectation of a level of service. Customers might come to you because of the price, but if the user experience is awful, they won’t come again, won’t recommend good and will give you a poor online review. Whether you’re a traditional face to face business, or are operating online and are e-commerce, you still need to have customer service systems in place. This can be as simple as ensuring you send the right product and send it promptly. This can be around great communication. If I asked your customer to tell me about your level of customer service, what do you think (be honest here) they would say?
Technology which works for you and saves you time is invaluable. Imagine an app which costs $39 a month, but saves you 2 hours every week. Do the maths – it’s actually making you money because your time (and that of your team if you have staff) is worth money. Make sure though you are not duplicating and that you’re using that particular app.
Now more than ever, we need to be keeping up on our maintenance. If you don’t have spare dollars floating around, then having to replace an item could potentially be hard. A well-maintained asset will last longer. We all know that the life of an asset is extended when we care for it, keep it clean, maintain and service it. Ensure that your staff understand this too. Even just maintaining air pressure in vehicle tyres to the optimal level will extend the life of the tyres. All these little things really do add up to your business budget.
Safety & Corner Cutting
Safety is another one you shouldn’t cut corners on. You’ve broken your PPE glasses … and think you’ll do without for the moment. Your eyes (and that of your team) are crucial. In fact, you should have spares around. This is just one example. The same applies to cutting corners in workmanship. It might save a little time (and yes, I appreciate time is money) but if you do a poor job, then reputation and rectification are far more costly than just doing it right the first time. I’m all for business efficiency, but corner-cutting is rarely efficient. It usually comes back and bites you in the rear.
If you have customers coming to your premises, especially if it’s a shop or salesroom, then it must look inviting. If it’s looking worn, super out of date, dirty or dingy, then this is not putting your best foot forward and doesn’t lend to a great customer experience. I know I use that term a lot, but it’s very relevant. When you go to a luxury car service centre, versus your local garage, there will be a difference. You might not see the Italian coffee making machine, but your local should have clean uncluttered areas (reception isn’t your storage room) and a reasonable couch or chairs.
If you are experiencing cash flow issues, or simply don’t like wasting money, then rather than ‘easy’ cost-cutting or business budget cuts, look at efficiencies and improvements in your business. Having a business which is ‘a well-oiled machine’ will equate to efficiencies and non-waste, which is far better than just ‘easy’ expense cutting.
Business Coaching is very much a cost that covers itself many times over and improves efficiencies and effectiveness in a business. Doing something the right way the first time and making the right decisions at the beginning are a great start for a new business. Improving the business, increasing growth, maximising profit and internal efficiencies are just some of the many things that I work on with my Australian business coaching clients. Getting cash flow working, effective marketing and nailing that sale are just the beginning. When I look in-depth at a business and its operations, I will often notice lots of little things that really add up to substantial improvement overall.
Want to know more about my business coaching services? Give me a call directly on 0411 622 666 today.