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Small businesses are struggling right now. The economy is considered, by some, to be in complete shambles. Regardless of what business you are in, it is pretty tough to imagine moving forward without taking some kind of loss. Expanding the company simply isn’t in the cards, and focus on core business is important to increase that bottom line. With a more streamlined company, you can save money and weather the storm of this shaky economy.
To improve your ROI (return on investment), companies often find ways to streamline processes and production. They may turn to a cheaper form of transportation to get their products across the country. They may even cut out parts of the business altogether in order to save money while getting the best possible profit. The end result is usually a contraction of the business. While this helps in many cases, it can also be a detriment to future growth. You have to think about what position you’ll be in after the recession.
The knee jerk reaction of any company in a recession is to find ways to cut back on staff and staff related events. The first thing that usually goes are new hires and training followed quickly by elimination of bonuses and other office parties and team building events. The next phase is through salary cuts, downgrading 401k contributions and cutting health care benefits. Finally, work force reduction is considered to reduce overhead. What you are left with is a lot of disgruntled, fearful employees who will immediately start looking for new ways to leave your company as quickly as possible.
But is cutting back on employee benefits to improve your ROI all you can do to make your company more profitable? Certainly through the loss of good employees you may be hurting the company. When the economy get’s better, you may find your competitors suddenly employing the best people and outdistancing you in market share. Before you start cutting employees and their benefits, consider restructuring the company and the way they conduct their everyday business. You may be able to save 6% or more on overhead costs if you just make a few changes to the work environment and improve your ROO (return on organization).
The first thing you could to is to encourage a mobile work force. Imagine being able to give up pricy rental space while your employees work from home a few days a week. Being mobile would allow them to meet with customers more regularly and on the customer’s terms. This may require getting replacing PC’s with laptops, but the financial gain in the long run would be tremendous. Also encourage a paperless environment. You have laptops, so as long as there is no requirement to keep hard copy on hand, then make sure people don’t print out every presentation or document they own. With remote sharing such as Netmeeting and e-mail, there really isn’t a need to waste all that paper.
Make sure your employees have the tools they need to do business. Online databases where everyone can share data eliminate the need for meetings and time spent updating spreadsheets. This may free up an employee for an hour or two each week to work on other projects or to bring new business in. Imagine the effect that will have on your bottom line!
Make sure your employees understand that all sales they receive should be done through credit cards like Visa and Mastercard so that when it comes time for you to borrow money you can utilize some of the alternate forms of backing such as Merchant Money. With your employees backing you up here, you will be leveraging your resources for exactly when you need them. With your new workforce of remote workers, it won’t be hard to have your employees visiting with customers and showing them the improved processes.
Improving your business means more than just cutting back on staff and cutting out employee training. It means restructuring your workforce for better ROO and essentially improving your bottom line through the employees you currently have. Your employees will see this effort and will be excited that you are doing everything you can in this horrid economic environment to keep them employed. What you will end up with is a loyal work force that is willing to do what it takes for the success of the business rather than employees who are counting the days until the economy picks up so they can leave your company.
Written by William Jackson
CEO Merchant Money Inc.
http://www.gomerchantmoney.com
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