I heard this statement from a small business owner several years ago — “run your business lean and mean,” he said. But the difference between talking about it and doing it, you know, making the tough decisions to remove the fluff, manage the details and strategically market your message – is the difference between staying open and shutting your doors.
In “Losing Control Is Complexity’s Greatest Risk,” John Mariotti highlights the fact that small business owners have to eliminate waste. This includes managing and eliminating complexity where ever possible.
Complex systems that could be updated and simplified are costing you money now, but they cost you a whole lot more in a crisis. What’s the process for communicating with your staff? How do you train new members of the team?
Consider the tools that you use in your sales process or the system that you use to manage your people. How efficient are they? Is there a better option that’s easier to use, even if it cost a little more?
Remember: If it’s easier to use, but it cost more up front, then you have to run the numbers and see which one is more profitable over time.
But complexity is not the only issue to pay attention to.
John says, “Cash is like oxygen; if you run out of it you die.”
Have you ever discovered an opportunity for your company and the biggest issue between you and the next move was the cash-flow? Do you have enough money on hand to maintain and innovate, simultaneously.
“Cash-flow is…very often the limit to growth, and can be the ultimate cause of the demise of a business,” John says in, “Cash IS Still King.” And he encourages small businesses to keep as much on hand as you can. Because if your credit line is suddenly cut in half or off, it could cause a serious problem.
Streamlining your company and maintaining a healthy cash-flow are business basics. And so is marketing.
In “How To Get Your Customers To Do What You Want,” Ivana Taylor says “words disappear.” She says, “There is a distinct difference between the words that we say and the objects around us. Conversations…disappear. Objects take up physical space.”
Which means—we have to find a way to make our words stick. We have to communicate in a style that makes our conversation concrete and memorable. That’s where “strong simple mission statements” like Apple’s “Think Different” and Burger King’s “Have It Your Way” come in. It makes it easy to grasp the idea that Apple products are outside the box and Burger King intends to cater to you.
Ivana offers and explains a simple technique to help you get to your strong and simple mission statement.
Ultimately, our marketing message has to be “lean and mean” too, just like our staff and money management. Let’s face it, so much of our business is about getting to the heart of the matter—in every department, especially marketing (at least in my mind).
Cash Photo via Shutterstock
Great article Jamillah! I agree…cash is king and there is no business without marketing.
Many good points for entrepreneurs Jamillah!
We encourage our clients to calculate the number of days they have before they would run out of cash every time they print their Profit and Loss Statement. This is a very good indication of their company’s cash flow health. Calculate it with and without the company line of credit.
We find it makes the entrepreneur think “lean”.
Thanks for the thoughtful post!
All the best,
Holly Magister, CPA, CFP
That’s good Holly. I like the idea of knowing the number of days both before and after the company line of credit.