Do More, Not Less

Firms that want to stay profitable, or at least stay in business, have important decisions to make in today's economy. Profit is equal to your Total Revenue minus your Total Costs. During bad economic times your revenues are likely to drop. So what do you do?

A lot of leaders will look at ways to reduce their costs. The logic is simple: you have more control over your costs while your customers have more control over your revenues. After all, they ultimately decide whether to buy your product or service, and there's only so much you can control that decision, so it seems easier to go after things you think you CAN control. While it might be possible to save money through increased efficiency, many firms will look at the easiest way to cut costs: cutting employees.

There are some downsides to this, of course. You end up accepting that you're going to have lower revenues. You'll have to rehire people later when the economy picks up. If you don't hire them fast enough when the recovery begins you'll lose out on business to your competitors. And of course, some of those Creatives you let go will go work for someone else, and you may end up with inexperienced employees rather than a team that's survived together through hard times. None of these are great options.

So rather than shrinking your business, how about growing it instead?

If you've already got a strong Creative element in your firm, your focus now needs to switch to tasks such as marketing and sales. When your customers are spending less money, you need to expand your customer base to maintain or increase revenues. You need to look for new opportunities to expand, for chances to take over customers that your competitors are losing, for producing something that others don't provide. You've got talented Creatives working for you, so take advantage of that and put them to good use rather than letting them go.

Think about it: do you REALLY want to shrink your business if there's any way to maintain it, or even grow it?

It may seem easier to reduce costs than to increase revenues, but the good leaders don't choose an option simply because it's the easiest.