Companies need to plan to succeed, even when times are tough. I have recently read several articles that described companies that survived downtimes as those who invested in the future, expecting to come out of the down time strong, ready to capture market share.
It is hard to think like that when cash is tight, credit is difficult, and customers are harder to get and even harder to keep. I know that I struggle to keep the big picture in mind and not get discouraged.
I do know that it is best to not simply hunker down and conserve, but to seek for ways to be better at what we do. My friend, we shall call him Frank, owns and operates an HVAC business. He is doing OK, but cash flow is a problem for him too in these lean times. Instead of simply hunkering down trying to cope with tight revenue streams, he is investing in software that will help him improve cash flow. It will help to automate many of the tasks involved with job management and fee collection. He found an adequate solution with the features he needs at a reasonable price.
Now that is a forward looking approach!
Because I am helping him do this project, Frank can easily evaluate how this investment will help him with cash flow and job management. So what does that actually save him? Well, it reduces and in some cases eliminates things that drain cash. That makes cash flow to the bottom line.
How does that translate into another business? Currently companies are laying off workers hoping that a reduction in salaries and benefits will drop to the bottom line almost immediately. The employees left have to do more with the same amount of time, and in most cases have to work overtime. In some cases contractors need to be hired to cover the gap. These additional salary expenses are less than before because they do not incur additional benefit expenses.
But what if you could make those remaining employees more productive? What if you streamlined your processes eliminating non-value added tasks and automating time consuming repetitive tasks? Well, you might need less overtime, and maybe no contractors. More money to the bottom line. But even better, when times get good again, then you will be ready to do more with less, increasing your profits as your business grows again.
Yes, you can spend money to make money, but you have to smart in how you do it.
It is hard to think like that when cash is tight, credit is difficult, and customers are harder to get and even harder to keep. I know that I struggle to keep the big picture in mind and not get discouraged.
I do know that it is best to not simply hunker down and conserve, but to seek for ways to be better at what we do. My friend, we shall call him Frank, owns and operates an HVAC business. He is doing OK, but cash flow is a problem for him too in these lean times. Instead of simply hunkering down trying to cope with tight revenue streams, he is investing in software that will help him improve cash flow. It will help to automate many of the tasks involved with job management and fee collection. He found an adequate solution with the features he needs at a reasonable price.
Now that is a forward looking approach!
Because I am helping him do this project, Frank can easily evaluate how this investment will help him with cash flow and job management. So what does that actually save him? Well, it reduces and in some cases eliminates things that drain cash. That makes cash flow to the bottom line.
How does that translate into another business? Currently companies are laying off workers hoping that a reduction in salaries and benefits will drop to the bottom line almost immediately. The employees left have to do more with the same amount of time, and in most cases have to work overtime. In some cases contractors need to be hired to cover the gap. These additional salary expenses are less than before because they do not incur additional benefit expenses.
But what if you could make those remaining employees more productive? What if you streamlined your processes eliminating non-value added tasks and automating time consuming repetitive tasks? Well, you might need less overtime, and maybe no contractors. More money to the bottom line. But even better, when times get good again, then you will be ready to do more with less, increasing your profits as your business grows again.
Yes, you can spend money to make money, but you have to smart in how you do it.
Labels: business process management, cost saving, process optimization
posted by Ingenuus CEO at 10:05 AM
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