Manage Your Burn Rate….Now
There are three ways to impact cash flow: grow topline revenue, cut costs or do both. In this amazingly scary financial time, it’s likely that growing revenues is going to be trickier than cutting costs, but doing only the latter has the same impact as selling stocks near the bottom: we will upturn again and those who non-strategically cut costs (or sold near the low) will be left without the means to catchup and grow again, either company revenues or their stock portfolio.
Let’s start with cost cutting, managing your cash burn rate, since that’s easier. We’re living in an amazing time of choice with communications, online applications and other “2.0” type of offerings, many of which can replace traditional ones IF you’re willing to look, try and absorb them into your workflow and processes.
For example, some time ago we added Vonage VoIP to our Qwest installation and most recently been moving forward on Skype telephony for outbound national and international calling. Though we’re a small business, our telephony costs have plunged due to Skype and international calls are a fractional cost compared with even six months ago.
We’ve been progressively virtualizing what we do with Web 2.0 offerings as well as using Google Apps, offering digital downloads for our ebooks instead of delivering them on CD-ROM (saves tons of handling and manual work, shipping costs, plus our customers prefer it we discovered), and are leveraging tools better like our iPhones, Dropbox for file movement between ourselves and our outside designers, and web conferencing (both with Adobe Connect and through iChat itself) for collaboration as well as communicating with customers.
On the topline revenue side, it’s easier than ever to ask our customers what they want (we poll, send out email requests and our now offering free, brief phone consultations for customers) and the ability to deliver high design, more functional ebooks, publications and even consulting delivery (we use private client blogs to place all deliverables into one spot for our clients and their teams, password protected, and is a place they can then comment under, listen to audio snippets in a Flash player, or view our recorded screencasts or videos).
Mostly we’ve shifted our focus to both cost cutting and better targeting what we deliver so that it absolutely (and as perfectly as we can muster) gives our customers short term and strategic-level value since they want to do exactly what we’re doing: cut costs and drive revenue.
It’s interesting how we’ve cut our burn rate dramatically while hyper-leveraging all of these digital tools at-our-fingertips. I suggest you do the same right now and it will do two things: Focus you on sustaining and growing your own business even in these difficult times, and laser focus you in on the needs of your customers and prospects.
About Steve Borsch
SiteGround is 'The One'
Connecting the Dots Podcast
Podcasting hit the mainstream in July of 2005 when Apple added podcast show support within iTunes. I'd seen this coming so started podcasting in May of 2005 and kept going until August of 2007. Unfortunately was never 'discovered' by national broadcasters, but made a delightfully large number of connections with people all over the world because of these shows. Click here to view the archive of my podcast posts.