There’s a story in the consulting world of a group of partners who faced hard times.
While two of the three partners kept pushing for marketing and more visibility, the third partner (let’s call him Señor Cut), repeatedly pushed for aggressive cost reductions. The other two would acquiesce to keep a “consensus”.
Finally, things came to a head, there was almost nothing left to cut, and Señor Cut asked again for cost savings. When the partners asked him what was on his mind, Señor Cut suggested selling the large conference table in their only meeting room.
“It’s worth about $500, and that will pay rent for the next month.”
“And our clients and prospects, will sit on the floor or remain standing?!” one of the others replied.
The conference table wasn’t sold, the partners stopped trying to cut costs, and Señor Cut was eventually ousted and became a subcontractor.
You can’t cut your way to profits. And it’s highly tempting in tough times to treat money as a vanishing resource which will never be replaced again.
Oh. It’s highly important to watch your costs and expenses. To keep a keen eye on that, to spend intelligently. To cut where things are fat, to boost where things are thin.
However it’s important to remember: risk and reward. Tough times will separate those who are faint of heart, and those who are resilient.
(Oh, and yes, I totally stole this story from a book).
This originally appeared on my LinkedIn.