You may have read recent reports predicting the slowing of the economy in Australia. But it’s not slowing for everyone. And business owners who are savvy enough to make a move can avoid being caught with a sour taste in their mouth by making smart decisions earlier rather than later.
When economic times get difficult the common reaction among business leaders is to cut expenses. Things like marketing, staff and office perks get reduced, or cheaper substitutes for supplies are sourced.
But which expenses should really be cut?
Things like marketing, technology or office perks often get reduced because the immediate ROI is hard to judge (or is misunderstood). But is that the best thing to do? How do you know?
The answer is that every business should understand what the essential components are of their Business Success Ecosystem, and they should make decisions about maximising their operational efficiency and market impact with due regard to what drives the engine of their business.
And that varies from company to company, even for businesses within the same industry sector, as their goals, objectives and method of working may be significantly different.
Over many years working in the business advisory space I’ve seen that it’s often when times get tougher that business leaders start to look for ways to cut back.
Look to grow, not cut
However it’s the smart business leaders who, instead of automatically cutting back, look at how they can be more effective and be proactive in their market. They don’t look to cut, they look to grow.
Even if growth in top line revenue is difficult they look to improve their internal efficiency, their influence, the levels of employee engagement, the markets served, or other important areas of the business.
What guides those improvement decisions is a solid understanding of what’s really important for that business. It doesn’t come from making knee-jerk reactions or ‘going with the flow’ in cultivating a sense of economic dread.
A positive and constant focus on improvements
It’s about having a way of operating within the business that is positive and constantly focus on implementing improvement initiatives to keep the business moving forward, evolving, and being successful.
That sort of positive mindset can be tricky to instantly create if times get tough. As the old saying goes “When you’re up to your backside in alligators it’s hard to remember your original plan was to drain the swamp!”
It takes time to develop a practical business improvement plan that addresses multiple areas across the business. And all business improvement initiatives need attention from business leaders and staff to really get traction
Top tips to find the sweet spot for your company:
- Define the business growth goals to include more than just revenue
- Understand what the key success drivers/activities are for your business
- Ensure there is a plan to consistently work on those key activities
- Have robust accountability measures, so action (and inaction) gets noticed
- Involve the team – commonly said but much harder to properly implement
- Get excited about the opportunities, even if there is some economic gloom on the horizon