Resist management hierarchies, extravagant trappings, and costly fixed expenses. They are dangerous to our wealth.
Find ways to outsource to the experts and pay for what we need only when we need it. We will get better, more professional results. Think lean and mean, utilizing value added players whose contributions and effectiveness can be measured.
Everything in our business needs to justify its existence – it either adds to our bottom line or subtracts from it. For example, if management personnel adds value to our enterprise, keep it. If it doesn’t, eliminate it and opt for solutions that won’t continually drain our precious resources.
The late Southern Connecticut State University basketball coach, Ed Brown, used to use the equation, “Your worth to this team is equal to what you score plus assist other teammates to score minus what you allow the other team to score.” The point? Our net results are what count.
Be ruthless with this theory. Business cycles can change on a dime. And if we don’t practice money management skills, we will be forced to learn this valuable lesson the hard way.
Control extravagant desires. In a small business, less money going out means more money available to keep us afloat during the inevitable storms that come our way.