A tech company CEO offers ten tips on making 2009 a great year in business without laying off staff
With all the economic turmoil, everyone is talking about cutting staff. Treasury is predicting the unemployment rate could rise as high as 7.5 percent by next year and a third of businesses are indicating an intention to sack staff over the next three months. However, I feel very positive about business in 2009, especially in for technology solutions and in related sectors.
The presumption that staff levels must be cut is misguided: as a rule of thumb your wage bill should only be 18% of overall expenses. It seems that businesses are quick to cut jobs at the first chance they get.
As a CEO, now is the time that I must be asking what is most important to me: Success? Growth? Profit Margin? Turnover? What? It's then a matter of identifying the various factors involved in achieving this most important thing, not just creating redundancies left, right and centre.
If you control a budget, the technology sector in which I work offers many more inventive ways to save money. Technology can monitor how much each lead or sale costs you and whether you're paying too much or too little to win new clients. Automation can minimise the time you spend keeping your customers happy. You can save on infrastructure and travel if you work virtually or remotely (from home!).
If you're looking for ways to cut costs without cutting staff, here’s a quick list based on my opinion.
- Reduce Software costs, using more hosted applications.
- Reduce Marketing Costs - Consider the online elements of marketing (instead of focusing on the tradtional, expensive offline marketing models).
- Reduce Telecommunication Costs - Consider a hosted telephone system using high quality VoIP infrastructure
- Know your customers better – If you have a greater understanding of what your customer needs are, servicing them beomes that much easier.
- Stay on top of your spending – Every marketing initiative must be measured to give you exact figures for cost per lead, cost per sale and cost per interaction.
- Take another look at your online strategy – Review your website. Think of new ways of spicing up your website without resorting to a rebuild. Get a professional involved.
- Understand your market in 2009. How is your market responding to the economic slowdown? Review and consider a strategy to create a “Blue Ocean“.
- Ask your CIO/CTO, CMO and COO to bring in their recommendations on how to reduce costs and make 2009 a successful year (despite the economic indicators being against it).
- Review your staff training practices. If you dont have one, put one in place ASAP.
- Review your customer service regime – Use more online tools such as online surveys, email marketing, and newsletter publishing to manage those relationships and grow them into higher revenue yielding clients.
Above all else, don't let anyone tell you that 2009 is not going to be a great year.
Manas Kumar is CEO of Genesis Interactive