Business Advisory

A lean business is a healthy business. Keep fit year round

A lean business is a healthy business. Keep fit year round

Diets are temporary by their very nature.  They last from point A until point B, they are a means to an end.  What’s more they are usually the second last resort before far more drastic measures come into play.  The same applies in our businesses when we say we’re slashing costs, tightening the belt and other ways of whispering, “stay calm but… we have a cash flow problem, people!” At best it relieves some pressure in the short term, but at worse it signals to your team, key stakeholders and your family that things are not looking good.  Just like when someone goes to extraordinary lengths to achieve significant weight loss in an unfeasibly short period of time.  Don’t do it!

 

Professional Bodybuilding and Accounting

Yes they do belong in the same heading but only in this context.  Pro-bodybuilders used to bulk up in the winter, consuming otherworldly amounts of calories and supplements and then a couple of months before the big contest day they would literally starve themselves – almost to death!  Okay, regardless of your thoughts on this particular sport, there came a time when things took a turn for the better from a year round health perspective.  Instead of dieting quite so viciously for three months in the year, a number of athletes decided to stay relatively lean year round.  Sure, they didn’t look quite so massive in the dead of winter but when it came time to get into “contest shape”, they only had to lose a few kilos instead of say 25+ kilos.  Far more sustainable and easier on the digestion… I assume.

 

Avoid financial whiplash

All that is to say that looking at the year ahead, you could and should set your objectives and the KPIs that will get you there.  Then take a long hard look at the resources needed to make it all happen.  Do those resources include, weekly give-aways, lavish lunches at the finest restaurants in town and hire car upgrades?  No?  Then eliminate them.  You might miss some of the perks and what we sometimes call profit-killers but their absence will also stop you from having to unexpectedly wrench on the budgetary handbrake.  That’s how people and the businesses they run get hurt.

Year round conditioning is the key and success depends on you staring hard at your objective and consciously deciding to eliminate costs that do not get you closer to those goals.  Be ruthless at first and set yourself a baseline.  Understand that this will be as difficult as it gets and then you can plan to add a sensible layer of fat.  But that should come in the form of performance related rewards as opposed to perks that simply breed entitlement – which doesn’t help anyone.

A lean business model is one that efficiently delivers more sustainable profit and time for you to enjoy your life and loved ones.  And it looks good year round.