As we approach Christmas and get to spend more time with our family and friends in a spirited, colorful environment full of lights, we open our hearts and our pocket books to give and share what we have with others. While I cannot speak for you, it makes me feel good to give to others. When it is done with sincerity, I feel it has that effect similar to when the Grinch’s heart grows three sizes. It changed him. I look to the holidays to have that growing heart experience and hope the holidays have the same effect on you.
However, in certain areas of your business, I feel it is necessary to have a Scrooge mindset. I have experienced this in the areas of operations management, stop doing , and cash!
For operations management, I find it useful to go through all the expenses on a periodic basis and for each ask, “is this expense necessary and does this add value to my business?” I always do this at the end of the year and prefer to do it quarterly. I often discover things we are paying for that no longer need to be paid or that could be modified or reduced. For example, during this end of year review, I found that we were paying to store outdated documents off-site. These can now be destroyed, thus stopping that expense. My team is also reviewing our servers for potential consolidation and fee reduction. What expenses could you reduce or end?
What can we STOP doing in the true Scrooge fashion? Many times we take on too much and have to stand up and be a scrooge and say, “No, I can’t do that at this time because it will affect my other work.” It can be most difficult to say no to clients, but as I have experienced, it can be the most important thing you say in business. You can read much more on this in last week’s blog.
The last and most important area I’ll discuss is cash. We all know that not having the cash to pay our bills is a bad place to be. Therefore, being cautious and miserly in this area is prudent in the right context. Ask the question, “what can we do in order to get cash in faster and pay it out slower?” Extending cash outflow for thirty days by putting some of our expenses on credit cards could be an option. What are the opportunities to negotiate getting paid upfront or sooner from clients in exchange for some benefit to our clients? We have lines of credit in place and credit card availability as a back-up in this area.
As we go into this holiday season and the New Year, I am shooting for balance between being a scrooge in some business areas and growing my heart three times. Wishing you all a wonderful giving and sharing holiday season!