Ways to deal with a downturn in revenue

revenue imageWhen businesses face a downturn in revenue, many look for ways to cut costs. You’ll always find some waste and inefficiency and by all means that should be eliminated when you are looking for ways to save money. In smaller businesses, the biggest opportunity for savings is usually payroll. Small businesses typically don’t have bloated employee overhead so it’s more difficult to let people go. Slashing costs also sends the message to employees that things aren’t going so well. Not only do you have a revenue problem, you also are running the risk of an employee morale issue.

I would argue that instead of cutting costs to find more revenue, you put all of your energy, and people, into increasing sales. Look at ways to engage your employees in the marketing and sales functions. Since the way to grow a company is to make more sales, training your employees to help with that function is a smart move.  So instead of cutting a person’s hours, give them the opportunity to sell. Most employees would welcome a chance to learn a new skill, especially if the alternative is being unemployed. And your company will reap the benefits by having more people looking for more sales.

In my company I actively promoted the concept of cross-training so people were equipped to sell. It wasn’t uncommon that when we were slow, especially in the warehouse, those workers would be utilized in another capacity. I learned early on that people want to have work that is meaningful, so most of my workers loved the idea of helping in other areas.

–Barney Cohen

President, Business 360 Northwest

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