It’s decision time – cut fat, build muscle
It’s time to start making some tough decisions… cut fat build muscle.
To be in the best possible shape to get back in the game, you need to be planning further cost adjustments in your business now. It will give you some breathing space to consider the finer details. Don’t leave your deliberations and wait for the cash crunch to hit – because then it will be too late.
Over the past fortnight, we’ve been talking to our clients, business partners and our wider community, to get a sense of where their businesses are. And the very clear message is: “We need to get going again…” But that response is invariably closely followed by: “How do I know what costs the business can afford to maintain?”
It’s not easy trying to guess what the next 3 to 6 months is going to look like. So our advice is to have several profit and cash forecasts worked through. This will help you as things unfold – you can simply refer to the one that most accurately reflects what’s actually happening, and make cost decisions accordingly.
You also need to be sure that you’re cutting fat, not muscle.
Treat your business recovery exactly like embarking on a personal health kick – you’re looking to ditch the flab, nurture stronger bones and build muscle in all the key places, right?
So think carefully about what you want to achieve. You have an opportunity to not just bring the business back exactly as it was before – so look for better skills, better processes, better use of technology and genuinely useful efficiencies. This is your chance to redesign your business: what would you like to do differently?
As you look to bring ‘business as usual’ back online, prioritise your costs as ‘Essential’, ‘Not essential, but makes things significantly easier’, and ‘Nice to have’. That’s a great eye-opener, and makes decisions about what to continue and what to stop much easier.
Also, look out for the costs that “just happen” because no-one is asking “What are we using this for? What value is it adding?”. In times of need, every item of spend must earn its keep and add value. So question everything.
Finally, while you have this opportunity to redesign, don’t just bring back capacity, but look to build capability as well. Bring on those people with the expertise to help you get going again in the most effective way – the people you know can help you create and sustain a healthier, stronger business.
To help you work through this ‘cut fat, build muscle’ process, we’ve created a quick PDF to guide you. Download 10 tips to keep you on top of the numbers to get started.
Give it some careful thought – and shout if you’d like a sounding board!
Jennifer Raines, YRH Founder
Explore all the benefits of the affordable, hassle-free way to get the essential financial insights your business really needs. Give us a call on 01252 820 002 today for a free, no-obligation chat about how we can help…
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