The opinions expressed by the entrepreneur are their own contributors.
If you are now an owner of a small company, you will probably feel the tension in the market. There is enormous pressure to grow, to serve your customers, pay your team and still retain a healthy margin against the Background of a turbulent economy. At the same time you know that you cannot simply lower the costs blindly, because cutting the wrong things can put you in an even more difficult position.
Well done, strategic cost savings can actually make your company more slimmer, more agile and more scalable and it can give you more peace of mind. Instead of running your company from a place of fear, this time you reformes as a way to lean out your company and build a stronger basis. It can surprise you how you will run with less effective.
Related: 5 ways to save costs in your company
Insight into your costs comes first
Show studies That a large part of the owners of small companies is not aware of their most important costs. Before you cut something, it is crucial to zoom out and get a grip on where your money actually goes.
Labor is usually the biggest costs for small companies. If you do not yet have clear ROI data about the time of your team, this is the time to set it. These ROI calculations can vary drastically, depending on the roll, so if you have set KPIs, take this time to assess them. If you don’t, I would recommend working with a strategic financial specialist to set it up.
Anyway, looking at your income per FTE (full -time employee) is a good place to start. That KPI must be almost $ 500,000 per full -time employee. When you enter it, start to see where you can reduce their time in your team to be income generation or to reduce working time and costs.
Other expenses that tend to reduce fairly easy are, among other things, external contracting costs, unused subscriptions and travel costs. It is a sensible practice to assess these costs one by one every month.
This type of detailed financial assessment can be intimidating and stressful, but it is absolutely crucial to survive a delay as a small company. By now establishing this practice, you also create a strong habit of being financially smart in your company.
Related: Do not let these 8 common costs obstruct your growth and expand your profit
Consider delegating what and when
A common myth is that delegation always saves you time, but that does not always end. It can be expensive if it is done wrong, and every delegation you are currently doing is worth a second look.
There are a few things to consider evaluating what you are already delegating or if you are considering new delegating work.
Firstly, delegation works best if you have already systematized what is being distributed. If you first systematize, you delegate something that minimizes the costs of delegated work, so you maximize your ROI. This can look like automation in your CRM or make SOPs for your main practices.
Speaking of Roi, consider the ROI of everything you pay to delegate. For example, if you call your leads cold, consider the costs of each call based on the hourly rate that you pay and the number of agreements generated. This gives you an estimate of the costs per appointment that helps you understand the ROI of that investment. If you can invest the money elsewhere in your company with a better return, this is the time to shift that investment.
Related: 8 unconventional ways to save costs in your company
Do not cut where it counts
Most companies will go wrong by reducing investments that actually support long -term growth, such as marketing, support for customers or team culture, when they start to feel the financial pinch.
It is crucial to examine the ROI of each costs instead of cutting panic costs. If your assistant saves you 10 hours a week and you use that time to close deals, it has its own return. If your operations manager helps you to retain important clients, that is a return. Make your best estimate of what that return is to help you make that comparison. Count to close the value of the deals they have helped for your assistant. Consider your manager how many important customers they have helped to re -sign.
An effective way to prevent this is by investing more in customer delivery for your existing customers than on growth. By ensuring that the delivery of your customer is first -class, you can strengthen growth by creating fans who then refer to you while better retaining your existing customers. This can give you a versatile return on the same investment.
Despite the delay that many small companies feel in real time, the goal is not just to survive at the moment. It is rather to build a company that is effective and lean. Then, when the economy is inevitably overlooked, you have built up an efficient company to build, and you have bent the muscles to follow your finances regularly and make data -driven decisions about them.
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