The time comes for every successful business to make some hard decisions about cutting costs. Truly successful companies get over those times and move on to better things. But every business owner has that moment of truth realization that things are not going as well as they had hoped. In that moment of realization, they know that something has to be done, and fast.
At such a time, it is easy to do the wrong thing and cut the wrong program. They make that decision in a moment of panic. That is a recipe for disaster. First, you have to stop the bleeding before looking for a permanent cure. In the case of a business emergency, that usually involves securing the capitol to keep the ship afloat during a difficult phase.
The first thing you should know is that there is no need for panic. You can find resources. Start here to learn about the various types of loans that are available for different sized emergencies and that will fit credit profiles that have a few scars. One mistake doesn’t need to be the end of your business endeavors. Use it as a learning experience and get the resources you need to survive. You are going to have to make some cuts along the way. But choose wisely. And hold off on the following cuts until there is no other option:
Employee Benefits
Your workers are the ones who are going to help your company get out of its current death spiral. This is not the time to tick them off and make them feel underappreciated. Think long and hard before cutting benefits like dental and vision plans.
Some employee benefits are mandatory depending on the size and location of your business. You can’t just treat them with casual disregard when the going gets tough. Be sure to check with your legal team before you start making deep cuts to employee benefits.
If benefits cuts are needed, you can outsource HR and benefits. This does not have to be done internally. But the more removed these aspects of your business are, the more impersonal your business becomes and the less invested your employees become in the process. For them, it is just another job at that point. And they will replace it with something better at the first opportunity.
Positions of Expertise
Not every position in a company requires as much expertise as others. However, some workers are irreplaceable because they are the only ones who actually know how things get done. Lose those people and you will be in a worse position than when you started. In a medical practice, some of those people are in billing.
You can outsource a lot of that work if it becomes absolutely necessary. But those are often the people who keep the office solvent. They know the systems, the patients, and the processes involved. It might be a lot harder to replace them than you think.
Customer Service
No business can survive long after customer satisfaction has left the building. Your customers are your business. Stop serving them and your business deserves to die. Many companies treat their customer service department as if it were expendable. It is often treated as a necessary evil that they wish they could live without.
Not only are customer service departments under-appreciated, they are usually underfunded and understaffed. What staff that department gets is usually poorly trained, entry-level labor. They get entry-level pay and are the first to be let go when things fails to turn up roses.
That is a mistake. When things get tough for the business, you have to invest your way out of it. Investing in customer service is an investment in your customers. It is a lot easier and less expensive to retain existing customers than to acquire new ones. The way you double-down on retaining the customers you have is to double-down on your customer service department. They are the ones who directly manage the relationship between the customer and the company. When that relationship turns sour, everything else does too. Cut that department only when there is nothing else to cut.
It might not be possible to stay the course when the storm winds blow. But it is possible to keep your head and only cut employee benefits, critical staff, and customer service as the very last resort.
