Interesting article today on Businessweek.com about the importance of recognizing your business costs and getting them under control now verses later, when it could be too late:
“…by recognizing the problem early and making moderate reductions, small firms can avoid more severe cuts later on, financial experts say. Companies that ignore warning signs can erode their profits with rising costs, and those that borrow to meet those costs can wind up insolvent.”
How many of you are looking at your personal or household budgets and cutting expenses? Change vacations plans? Did you dump those magazine subscriptions that you don’t need?
Why wouldn’t you do the same thing at your business?
The answer is, you would! No question. Right?
Now, here’s the next question. Are you being smart in your cuts, or are you looking at the highest costs and slashing them without really looking down the road and seeing what the cut is going to do to you later on? How many of you immediately shut down your advertising campaign? Canceled all your trade show appearances? Eliminated a position or two on your staff?
Let me say this again. Cutting your business costs now verses later is a good idea… but making sure you make the right cuts is going to make the difference between having a strong and functioning business and a “just hanging on” business down the road.
You are in business now because you made smart choices. Keep that up. Pull open your budgets, study your cash flow, your planned vs actuals, your forecasts. Adjust them for the good, the bad and the really really ugly. Be brutal in your projections and then look at your costs.
Make a plan. A good plan.
Now is not the time for guess work and hasty decisions. You can’t afford it.
‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software
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