Most of our businesses are doing well, but some have seen their top lines flatten and a very few have experienced sales declines.
Bottom line-wise, our business owners have seen their operating costs escalate. The cost of goods, taxes, health care, energy, professional services have all been rising. Most have been very good at maintaining their margins by controlling their variable expenses.
But nipping and tucking only gets you so far, as we are finding out in the debate over growth versus austerity at the national and international level. You can't cut your way to growth over the long term.
Successful business owners find ways to continually fund improvements in their people, processes, operations and themselves. But it is an often-agonizing decision, like seeing the dentist; parting with a dollar is like having a cavity filled.
How do you know if and when it is safe to invest in growth? How do you decide between competing priorities, e.g., increasing marketing, hiring a new salesperson or buying equipment?
Start by asking yourself:
- Am I addressing an acute or chronic need?
- Is this investment in line with my vision and strategy?
- Will this investment save me time to do more productive things? Or will it distract me from more important initiatives?
- What are my current resources? What options are available to me and at what cost?
- Will this investment make me money? Over what time frame?
- Can I measure the ROI?
If the answers are no -- there is a very real and tangible pain that needs to be addressed -- we then step through a series of additional questions, evaluations and calculations specific to the pain/need, and develop a SMART approach to tackling the objective.