Getting expenses in line are particularly important in any business. With today’s economy any business must face the challenge and the responsibility of staying financially profitable. We have a responsibility to those we employ, serve as clients and partners, and to ourselves.
However, we must always remember: We cannot save our way to prosperity.
Saving our way to financial health is always a good thing. But we must always take this as a step or a stage in our business in realigning that business back to success. Successful businesses evolve. With today’s technology and business climate evolutions occur constantly. Our competitor’s years ago may be gone, but new competitors always arise to challenge for your market share.
So what do I mean when I say, you cannot save your way to prosperity?
I make this statement because smart businesses realize that when the need arises to adjust expenses to regain financial health, that if the business leaders are only satisfied with that stage, then your prosperity will not last. To gain prosperity you must evolve and implement a development plan to evolve and increase market share. Instead, many businesses that save their way to being profitable relax, and even may take credit for their financial change and believe they have arrived. This can be costly.
Smart business leaders realize that it is not about ego, but it is about execution. Cutting expenses and realigning personnel is smart, but its stage one. Your business still has competitors working to take your market share. If you relax and lose a little market share then that expense cutting savings is lost. It is important that in your strategic planning that you develop a plan to not only maintain business, but to grow business.
In stage two planning you must define if your business, service or product is becoming a commodity? The danger of a becoming a commodity in business is it then becomes more about price than why you are different or better than competition. So, stage two is to define how you will be different.
Proper strategic planning has in depth SWOT Analysis on your business done by your leaders and your business planning team. Smart businesses include SWOT Analysis conducted by key customers? An external point of view may help you realize how you are viewed verses how you view yourself. Another key is to conduct and execute SWOT Analysis on your competitors. How are your competitors evolving and how do they compete against you?
There is an old saying that states, “It takes money to make money.” Sometimes this is easier said than done. However, when we save our way to prosperity, we must have key performance indicators defined through strategic planning that allows your business to strategically implement that plan as a calculated risk and not a blind risk. Having a strategic plan allows the ability to measure and make adjustments when necessary because of the visibility of the plan.
So, if your business needs to realign its expenses to gain that responsibility of being financially fit then it is important to create that plan, assess the plan, and implement the plan. But the whole plan has the next stage that when implemented will create and define market and business differentiators. Those differentiators must include the key elements of people, strategy, and execution.
Saving your way to prosperity without gaining business is a hallow victory. The battle is making your business leaner but better suited for stage two, gaining market share.