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StrategyDriven Tactical Execution Article

Cut Your Expenses Without Cutting Quality

StrategyDriven Tactical Execution Article
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So hey, here’s a shocking newsflash for you: starting and running a business is expensive. And if your expenses aren’t being eclipsed by your profits, then your business isn’t going to last very long at all. This is why you need to ensure you’re not making mistakes when it comes to those expenses. Here are some of the smart ways that new business owners can start cutting expenses – without cutting quality.

First up: keep track of your business expenses!

You’re definitely going to have a hard time cutting your business expenses if you can barely remember how much you’re actually spending! Gathering the required data is the first step to improving many areas of business, and finances are definitely no exception.

StrategyDriven Tactical Execution Article
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The mistake that a lot of new business owners make is that they underestimate the importance of all this. That, or they assume they can keep track of expenses – or do all the bookkeeping – by themselves. But when your business starts taking off a little and starts buying assets and making deals, then those costs are going to get a lot more difficult to track, and very quickly.

Don’t make the mistake of trying to do all of this without an accountant. Work with them to track your expenses in as detailed a way as possible. Only then will you know what areas are costing the most money and where you can start making some cuts.

StrategyDriven Tactical Execution Article
Photo courtesy of Ben Osteen via flickr

Telecommuting is the way

There are loads of benefits to having your employees physically there in the office with you, no doubt. But when you that’s a requirement to run your business with the model you’ve chosen to use, then you have to introduce so many expenses.

The costs of running a business are often so high because you have to account for all those employees! The biggest expense in this area, of course, is the total cost of labour in the form of employee salaries. But there are loads of other costs to consider. For one, you need to ensure that you have an office big enough to house the employees. You also need to consider utilities – electricity and water usage.

StrategyDriven Tactical Execution Article
Photo courtesy of Mark Rowland via flickr

There are also problems of time. How many times have you seen employees – or even yourself! – show up late due to commuting problems? And time is money, after all. The key could be to have workers telecommute, i.e. work from home. This is easier than ever with cloud computing and portable technology. Telecommuting has also been found in many studies to increase productivity – which means that you’re getting more bang for your buck when it comes to paying those salaries!

Proper inventory and supply management

Your business is going to have to buy a lot of things. If you’re an office, then you’ll have to buy loads of stationery, furniture, food, all that sort of stuff. If you’re in construction, then you’ll need to acquire equipment and permits. Regardless of your specific field, there are always going to be things you need to bring into the business.

StrategyDriven Tactical Execution Article
Photo courtesy of Ilmicrofono Oggiono via flickr

All of these things need to be sourced, investigated, and purchased (sometimes via auction!) at the best possible price. You need to ensure that you get the most quality from the inventory and supplies that you’re procuring. Tracking orders, shipments, and invoices is also required. If all of this is done wrong, it can get very expensive – and without the quality to support how much you ended up purchasing.

Mistakes in this area will cost your business a lot. Even the smaller mistakes eventually build up over time and reveal themselves to cost a lot in total over the course of a year or so. When business owners are having a hard time finding out precisely where they’re losing money, the fault is often found in bad supply management. This is why you should put a focus on find a supply (or procurement) manager that is highly experienced. Companies like Portfolio procurement can help you find who you’re looking for.

StrategyDriven Tactical Execution Article
Photo courtesy of Phil Whitehouse via Wikimedia

Hiring the right people

If an employee isn’t very productive or simply isn’t very good at their job, then you’re losing money. A lot of business owners don’t see it this way, even though they’re not happy with the situation. They don’t think of employees in terms of an investment, or an asset.

To some extent, maybe we can be thankful for that. It’s nice to be seen as, y’know, a human being instead of an asset or an investment! Still, this is the world of business and finance, and sometimes you need to abstract the human element to gauge just how well something is working. And if an employee simply isn’t doing their job all that well, then you’re not really getting what you paid for, right?

StrategyDriven Tactical Execution Article
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One of the ways this can be tackled is by improving training when new employees begin. But a lot of business owners prefer non-formal methods of training; being guided by a fellow employee, for example. And if you do currently have employees that aren’t pulling their weight, then you need to have a word with them about their performance. The better the feedback you give, the more the employee will take on board. Hopefully, this will result in much stronger performance in future!

But perhaps the best way to ensure that costs are saved to the greatest extent is to hire the right people in the first place. You may wonder how such a thing is possible – can’t you only really tell how well someone will work once they’re on the job? The problem here is that business owners aren’t always as discerning as they should be. Especially if they’ve set themselves a date by which they need to have an employee.

Unless things are extremely urgent, you should be willing to take your time. Don’t fill that vacancy until you’ve found the best damn employee you possibly can. This can sometimes cost more when it comes to actual search methods, and you may feel that the empty position is, in itself, a loss of potential earnings. But in the long run, the expenses connected to that employee will seem better spent – and will really be worth it. This is one of the most underrated methods of reducing business expenses – by hiring the right people to boost your profits!

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William Dann

Middle Management – The Leverage Point for Performance Improvement

Over 30 years of management consulting has made clear that the locus for a breakdown in performance improvement lies in middle management. Organizations focus on building executive teams with mixed records of success. First-line working groups tend to naturally coalesce as teams as they are doing the same work, share the same view of the organization, their customers, etc. But, the middle is often a desert between these two groups.

Middle managers oversee several functions which do not naturally come together as a team as is the case with front line groups. They are often not in the know and lack consultation regarding strategy by the executive team, so there is no shared reality there either.


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About the Author

William DannWilliam Dann is founder and president of Professional Growth Systems, LLC, (Anchorage, AK) and author of Creating High Performers: 7 Questions to Ask Your Direct Reports.

For more information visit ProfessionalGrowthSystems.com.

Brandi Stankovic

Resolve to Improve Your Company or Career in 2016!

The start of a calendar year is usually a great time for evaluating the leadership and growth of your organization, and ways to take your own career or company to the next level. What better way to start off the New Year than assessing areas that need improvement and establishing new goals for the immediate and long term future. For many executives, especially ones who are already somewhat accomplished, this task is easier said than done. From time to time, we could all use a little help figuring out next steps and how to get there, yet not everyone can afford to hire their own personal leadership coach.

Below are a few key lessons from The Strategic MVP on cultivating a personal brand and unleashing one’s ‘inner nerd’ to help you become a true MVP.

1. The Importance of a Personal Brand

Similar to the brand of a company, your personal brand is the feeling and experience that people have when they interact with you, think about you, or talk about you. Do you have an identifiable personal brand? Managing your personal brand can be one of the most important things you do as you progress in business. What do you want to be known for? If your personal brand is authentically focused on your career aspirations, then the right people will think of YOU when the right opportunity arises. Your personal brand should articulate your values, story, message, and things that are important to you.


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About the Author

Dr. Brandi StankovicDr. Brandi Stankovic is a professor, organizational change expert, motivational speaker and mommy who inspires firms globally with her models of leadership, engagement and award-winning education. Her clients include billion dollar organizations, trade associations and non-profit foundations.

The Strategic MVP (co-authored by Mark Thompson) is an interactive guide offering motivational lessons from the world’s top CEOs (Warren Buffet, Sir Richard Branson, Martha Reitman, Ingrid Vanderveld, etc.) and ongoing workshop-type exercises. These exercises help readers identify challenges specific to them while offering solutions to help develop important business skills that will take their career and/or organization to the next level.