Cutting costs and improving Cash Flow is where all small businesses need to be right now. The big question is where do you start?
Recently the owner of a small business said to me I am quoting for more business opportunities than ever before, converting less, constantly running short of time and my costs keep going up.
He then showed me into his office where ring binders full of quotes that had not converted to orders were stacked in waist height piles, taking up valuable floor space. May I first say that these guys were experts at filling quotes, with a keen eye for methodical approach, and if that had been their core business they would have been very profitable. Mentally I could see cash sticking out of the ring binders and falling onto the floor. He asked me the obvious question why have I lost out on so many quotes? His business was a car body repair shop and rather than provide an answer to a subject I knew nothing about. I asked him to indulge me as we started to evaluate how much money he had invested in creating the stacks of quotes.
The results were staggering in one year alone he had investing about two years wages, which had ultimately feed through to his bottom line costs and explained why he was busier without seeing any improvement in cash flow.
Small businesses cannot afford the luxury of doing “business as usual” in a recessionary environment it is critical to re-evaluate how your business operates.