Lessons Learned Should Become Habits Formed
Posted on 17. May, 2010 by Dean Kreh in Finance
As business starts the slow climb out of the recession, it is important to make a habit of strategies you learned to use to survive the recession. Too often business can be tempted to let up as times get better. Cash starts flowing more freely, and the pressure eases to watch every penny. Don’t give in to the temptation to let down your guard. Controls are in place and more importantly, the mindset is in place to be diligent. Take advantage of all the hard work and sacrifice and make it a permanent part of your business practice. What helped business survive can now help business thrive.
It’s a simple formula. Take the sales volume from a few years ago and run it through a business operating much more efficiently and more cost effective, and you yield more profit. Then build that profit to reinvest and grow. The habits developed to survive, should continue to be used to grow. Let’s look at some common examples.
People: usually the first to go and often the first to grow. As sales grow, business tends to hire again as cash is available, not necessarily because they are actually needed, but because it is perceived they will be needed to handle the increase in sales. The recession forced business to do more with less people. Maintain these productivity standards and metrics, and as sales grow, hire only as the metrics dictate the need, not because cash is available to hire. In other words, the business may have the cash, from sales, to hire two new people, but the metrics show only one is needed. Don’t give in to old pre-recession metrics, stick to the ones that got you to post-recession.
Business costs: Success often breeds laziness. When times were good, how often did every line of the phone bill get looked at, or was it simply paid month after month. Many companies paid for extra lines and services they no longer used. To survive, business looked at every penny spent to justify its benefit to the operation of the business. Why should that change as business gets better? It shouldn’t. The strategies to find cost savings should now become habits integrated into the everyday procedures used to move from survival into growth.
In order for business to move forward, it cannot revert back to business as usual. The strategies adopted to survive the recession cannot be viewed as simply a stop gap measure until business returns to normal, but must be embraced as a fundamental long term change in operational strategy to adapt to a fundamental change in the economy.
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