You Cannot Only Cut Your Expenses to Business Success
Thursday, January 31, 2013 • 11:49am
Many companies, when faced with a tight economy, try to stay in business by cutting expenses. They believe that this is the method that preserves their cash flow. For a short time, this will work. But, over the long term, this is not the way your business will be successful.
Companies all over America are laying off staff. How does that affect your remaining staff? They are demoralized, cutting into their productivity, and probably looking for a new job. If you have laid off employees, take affirmative steps to reassure your remaining employees that you value them and that you are taking the steps needed to keep the business going. If you give them a chance to contribute ideas about how to improve processes or create new products or services, you could find yourself with more income than you had hoped for.
Are your trying to save money on marketing? You may need to spend more in tough times to keep on top of mind of your customers. This is not the time to cut this area of expenses. If you are trying to save money, be creative about your marketing. Look for ways that work but are cheaper and do more of those things. You should be tracking results to ensure that you are spending your money wisely.
What you should be doing is thinking about how to get more revenue. This is the pathway to long-term success. How do you get more leads of better-quality customers? Can you raise prices (yes, this is counter-intuitive but you want customers to think of you as top-tier not bargain basement)? What can you do to get your customers to buy more often or spend more per order? Can you add services or products in a bundle at an increased price? Can you work with another company in a joint venture?
Think in terms of growing, not shrinking and you will be more likely to be in a mindset to weather these difficult times.
Robin Gronsky is a Ridgewood attorney who concentrates her practice on business law, representing buyers and sellers of homes, and estate planning.
The Guest Column is our readers' opportunity to write about a given issue or topic in an in-depth and educational manner.
The opinions expressed herein are the writer's alone, and do not reflect the opinions of TheAlternativePress.com or anyone who works for TheAlternativePress.com. TheAlternativePress.com is not responsible for the accuracy of any of the information supplied by the writer.