Do you know where to start? You know when something big goes wrong in your business — when a contract isn't renewed, or a product line doesn't sell. But not every business owner knows when little things go wrong. Little expensive things, that have a big impact on the bottom line.
When business is good, it can be easy to ignore the little things and spend your energy on the bigger picture. But when the economy takes a downturn, it really pays to take a good hard look at every aspect of your business.
Which of your customers are actually costing you money? I'll bet there are more than you think. Customers who require a lot of support, who aren't satisfied with the work you do, who demand large discounts or special deals, who never seem to appreciate your service or product. Find out who they are it may be time they looked elsewhere, and you concentrated on the customers that value your company.
Don't take things for granted. While it's true that longstanding relationships with trusted suppliers can make things smoother and easier, you need to be aware of competitors' prices and services. You want to be sure you're getting the very best deal you can on every transaction. And don't be afraid to ask for a discount.
Got a feeling that someone's not pulling their weight? Think you might have to downsize, but don't know where to make the cuts? Keep track. Get people to write down what they do each day everything from high level planning to fixing computers. Find out who's doing what and how long it's taking them. Because without that knowledge, you'll end up hiring and firing on a hunch. And you might just lose your most valuable employees.
Negotiate, reduce, cut. But first, find out how much you're paying now. What does your phone cost per month is there a cheaper plan out there? How many color copies, faxes, printed and bound reports does your company produce each month? Do you track and charge for them? What about travel expenses? Stationery supplies? Rent? Before you start cutting, you've got to know where to cut. If you're not keeping track and recovering this type of cost, you're losing money.
Big pictures are painted with small brushstrokes
Being successful during difficult economic times means paying attention to each small brushstroke that makes up the big picture of your profitability. Because what you don't know will hurt you. And what you do know will help you build a stronger, leaner, more profitable company.
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