In these days of economic turmoil (no, the problems are not over yet), it is not surprising to hear of businesses, big and small, cutting back on their expenses. I was just talking to a friend who runs a big BPO operation based in Europe. Majority of his producing entities can be found in Asian countries. Despite the fact that he has already saved a considerable amount in moving his operations offshore, he is still very much worried by the economic situation.
I can just imagine the plight of small business owners. With the prices of most everything going up, they are also being forced to increase their prices and at the same time, cut back on costs. I read something about a lean business â€“ that is, one that spends on only what is necessary to improve profitability.
However, the author notes that cutting back on costs should be examined thoroughly as there are some cut backs that may actually do more harm than good to your business. Rieva Lesonsky highlights some of these areas in her article.
Of the areas she took note of, I particularly liked two. These are little perks and marketing. This is what she has to say:
Don’t be a penny-wise and pound-foolish business owner. You may think you can trim the fat by eliminating the morning donuts or the company parties, but the money you save will quickly be replaced by lowered employee morale.
I think that nothing can match a good morale and work attitude. These things should be nurtured â€“ the rewards are worth more.
With regard to marketing, this is what Lesonsky thinks:
I’m a big believer that recessions (or near-recessions) are actually a good time to increase your marketing budgets. While that might sound counterintuitive, it’s not. While most businesses are hunkering down, waiting for the good times to start rolling again, your marketing message will be heard more loudly in the vacuum. Trimming your marketing budget (whether that means creative or staff or both) will likely hurt, not help, your business.
I tend to agree with her. Take advantage of the times. Be more aggressive and gain the attention while your competitors are quiet.