The regular message we are getting from our contact with a wide range of businesses is that times are still uncertain.
Hopefully, having a date set for the Federal election will provide a degree of comfort for both businesses and consumers. However, irrespective of who gets to form government after 7 September, there are some major economic issues for them to deal with.
As business owners we can’t just sit back and wait. We need to be pro-active about doing the best we can for our businesses.
Inevitably, cost cutting remains on the agenda of many businesses. Through our Outsourced CFO service, we are asked by a range of businesses to help with this task.
Our recommendation is to make sure, as the business manager or owner, you remain strategic in your thinking.
It is very easy to simply remove or cut some cost items from your budget. However, what will the impact be for the medium and longer term?
Some suggestions for a targeted approach include:
- Value engineering – have you looked closely at your products and services to make sure that all the features offered to customers are truly necessary? Do all customers need them? Could differential pricing enable you to remove the cost from a significant portion of them? This kind o approach ca lead to some great benefits.
- Priority based budgeting – rather than budgeting costs as ‘last year + CPI’, have you pulled apart your costs to see what makes them up? Have you checked that the processes that cause your costs are still the right ones for your business today? Mapping your processes and costs may uncover some surprises and lead to unexpected savings.
- Review efficiency and effectiveness – are all the processes within your business being done the best way? What about the way you find and engage with customers? What about the way you source your core products or people? Are the right activities being performed by the right people at the right time? Taking time to make these assessments may uncover some quick financial gains.
Whatever approach you use, the key to getting positive financial results is to be systematic and thorough in your assessment. Of course, having decided on what is needed it is then all about IMPLEMENTATION of the change. Not always a pleasant task, but until you make the change you wont see the rewards.
Our Outsourced CFO™ service is here to help your business grow. To discuss your specific needs please contact David Young email@example.com or John de Blonk Smith firstname.lastname@example.org or call us on 07 3221 4465.