Business sustainability and futureproofing are the key fundamentals to building out your Essential Spend strategy.
The critical aspect that must be at the forefront of all your thinking has to be:
“What matters most to the customer”.
With this as your north star, you can analyse in a tangible and impactful way, what to keep, and what to cut out of your spending review. After all, if your customers do not feel valued, or you end up losing customers due to concentrating on the wrong aspects of your business, you will lose customers.
Business = Customers & Cash
Without customers there is no cash. Without cash there is no operational capability. If you have neither, you have no business.
So how do you decide what to keep?
We believe there are two main decision-making factors all types of business should be focused on, regardless of sector
- Whatever will increase/help top line growth
- What will reduce costs
Are there aspects of the business that can be removed?
For example:
Do you still need the office that you will undoubtably have kept throughout covid?
With the world fundamentally changed and employee expectations with it, working from home has become a norm so do all those extra overheads of running a large office make sense?
Can you still meet the companies needs internally and meet and exceed customer expectations with the capex reduction?
Taking away completely unnecessary and expensive costs that are there perhaps under the guise of “it’s how it’s always been done”, will immediately improve your business sustainability and durability from an expenditure perspective. The obvious statement.
However perhaps the more uncommon truth here is that you will likely meet your employees where they want to be met…
At home enjoying life, being more productive, doing better work whilst also being more likely to stay with your business!!
It’s an employee’s market out there so retaining great existing employees that live and breath your purpose rather than loosing great people and having additional costs to recruit and train new is absolutely fundamental to the way you must review your essential spend strategy.
The same can be said for the company car!
Are there ways to reduce the cost of travel for your employees, while still making them accessible? Are the products that you’re offering a necessity?
…or are they ego driven?
Do your customers really care that your are developing a new product or service? Do they want or need it? Have you asked them? Improving a service you already have, or indeed the products you already have may mean far more to the customer and help keep that retention rate up!
The ever-unpopular concept of increasing the price of your products/services is a very major concern for businesses at the moment but rather than pre-empting the response, perhaps work out whether it could be the right course of action for both you and the customer? If your customer will ultimately be negatively impacted by you not increasing prices, what is the sense in not? Better to sustain your business and provide continuous solutions and services than go bust and let your customers down completely.
Maybe you should ask them?
They will understand if you are transparent about the situation, and you may even get some good insights!!
There will undoubtably be some hard choices to make and we are certainly not trying to oversimplify the gargantuan task that every business is facing at the moment. This is not a good time for the economy, but when it comes to futureproofing your business, all of these aspects must be at the forefront of your thinking going forward!
For more information how we can help, get in contact!
