Identify Your Success Factors
When you're considering any spending, the question to ask yourself is: "is it worth it?" Is this spending going to help the business' long-term goals, or is it simply going to bring in a quick return without leading to sustainable growth? In order to identify which expenditures are worth it, you need to be clear about your goals up-front. If you haven't taken the time yet to identify what your key profit boosters are, it's worth investing the time now to figure it out. Is it customer acquisition that really boosts your profit margins, or is it product costs that make the biggest difference? Identify what works best for your business, and focus on growth in that area rather than pursuing growth in areas that you know will be ineffective.
Set Up Policies and Procedures
Paperwork can be a major hassle and no one likes to do more than they have to, but sometimes adding a bit of paperwork can help to control spending while at the same time helping to promote sustainable growth. Chances are, you don't have enough time to make a personal decision on every expense or activity within your business. That's why it's important to set up policies and procedures so that your staff can make the right decisions without having to waste your time. And even if you have a one-person business, it's worthwhile to keep track of all of your business procedures on paper. That way you can identify which decisions lead to growth and which ones don't.
Keep An Eye On Your Cash
The simple truth is that you can't spend if you don't have any money. However, with so many figures being bounced around, it can be difficult to keep track of how much money you actually have in the bank. In order to effectively balance spending and cutting, you need to have a keen eye on your business bank account, and know the difference between profit and cash flow. Does your business actually have enough in the bank right now to pursue growth options? How about one year from now? Understanding cash flow will help your business thrive in this tumultuous period.
Any period, be it growth or austerity, is a good opportunity to make a frank analysis of where your business is at and where it's headed. Asking yourself tough questions, and being able answer them truthfully, will help you to determine whether to pursue that next big business opportunity, or whether to ride out the next big storm with the resources you already have.