More for less

I used to work with an MD who, every year in the budgeting round to set the annual plan, would ask for growth in sales with reduced overall expenses. We were in a large global manufacturing business, and of course his objective, even in a difficult market, was to achieve growth in operating profit to provide funds for investment in growth and returns to shareholders.

I didn't like this!

Now, while I was happy to grow my business unit's sales, I felt that having already delivered cost reductions in previous years I was not happy to keep on finding more and more savings. The staff were fully loaded and I couldn't afford to lose anyone; and we'd reduced material costs and pared overheads to the bone.

But what do you do? You just get on with it. You realise that it is important for a business that all of the senior staff are aligned with the company's goals. In fact the MD's 'more for less' challenge was just a reminder that in a difficult market you have to grab what net margin you can, and in our heart of hearts we realised that.

My staff didn't like it either!

They also felt they were working as hard as they could and had delivered all the savings they could. But there is always more to be found if you know where to look. Working together you have to be creative and imaginative, and work it out.

A maxim for a small business

So, I think 'more for less' is not a bad maxim to work by whatever the size of your business. Even if you run a small business, cost reduction should be part of your continual improvement strategy: get it right and it can increase the funds you have available to pay yourself as well as re-invest in the business.

And if you need to borrow, you'll definitely be more convincing if - alongside your passion for your business and your vision for a brighter future - you can show you are determined to keep a continual downwards pressure on costs. Engage your staff and get them to help you deliver it.