Ops in Real Life vol. 2

In the second episode of our series "Kendall Solves It," we dive into a challenge directly from the community. This week, we're addressing a popular operational issue, where businesses struggle with managing costs efficiently.

Community Question found on Reddit (we simplified and added emphasis): How do I reduce operational costs without sacrificing quality?

Kendall's Insightful Analysis and Steps

It's easy to panic when it's time to cut costs. When we panic, we have the human habit of cutting off what we need. We have work to do, so that we do not lead with emotion in a negative way or severe invaluable relationships while doing what is necessary. Asking myself the following questions and taking care to make the following steps have helped me determine a good plan:

• Evaluate all costs and prioritize them. This unfortunately frequently calls into question compensation of employees and contractors. Some people are misclassified and that can negatively impact our bottom lines.

• Ask yourself: What do I absolutely need right now and what does my runway support? Many of us (Black founders especially) do not often have long runways to support expenses during dry seasons in the critical years. 

• Nurture the invaluable relationships. Do not go asking for discounts that are not freely offered because your suppliers' businesses have to run as well, but communication is key. I have been on the receiving end and the one providing the update when a contract needed to revert to as-needed or pause indefinitely. It was not ideal in either position, but it allowed us to sustain the working relationship and keep communication open setting realistic expectations of the current stages.

• For line items you cannot afford to remove from your budget, evaluate other costs. This economy is tight, but you would be surprised how many tools we pay for when we are able to access the free version or use them on an as-needed basis. Connect with your accountant and operations manager to determine excess spending. 

• Sometimes as the CEO, we do not always see the expenditures up close and personal anymore depending on our current level. When we are hyper-focused on the big picture, we need insight on the micro levels of operations. Connect with key stakeholders on every level of your company (not just other executives, the people heavily involved and crucial to daily operations) to get that necessary information to determine what is useful and pivotal to operations. 

Cost cutting strategies are not cookie cutter even amongst industry peers, but knowing industry trends can provide insight. Finding ways to reduce spending does sometimes inevitably cause growing pains, so show yourself grace. It is necessary to analyze all the factors unique to your firm when implement major change strategies including those directly related finances, so be sure to work with your trusted team and advisors to identify the strategy that works best for you. 

What have been your experiences managing costs in the current economy? Are there other operational issues you would like to see answered in one of our episodes?

Community-driven solutions are so important to us. My team is committed to addressing real-world problems that impact business operations.

I hope these tips help you begin the process. For tailored solutions and more in-dept partnership in solving your pain problem, consider scheduling an introductory call.