I recently had a conversation with a team member about the concept of profit. First, I’ll set the scene: we had just reviewed our year-end financial results. All of the finance acronyms were flying around, lots of line items, you know the drill. In the end, it all muddles the fact that whether you run a shoe shine kiosk or a large public company, the basic profit equation is the same: Profit = Revenue – Expenses.
The revenue side of the equation can be more challenging to predict and control, but most business expenses are actually a simple matter of choice. Business owners can choose whether they have a fancy office, a small but functional office or no office at all. They can choose to hire or not hire, have large expense accounts or place limits on them, fly economy or first class, invest in new equipment or go another twelve months without.
For the smaller business, the choices a company makes about spending can really affect the bottom line. Gradwell has grown over the years but we still adhere to some of the lean style cost management behaviours we had to adopt whilst we were a start up. It’s logical to ensure that every business expense has a clear correlation with value and profit. If an expense does not reduce risk exposure or increase our bottom line, it is often considered to be a potential waste of company funds that can be spent elsewhere in the business, doing something of more value.
This is not to say that our team members are sitting on stools, propped up on broken desks. Of course we have everything we need: we have a nice office in the centre of Bath, we hold company outings, pay competitive wages for skilled team members, sponsor events and charities and we definitely invest in technology; we just don’t overspend very often.
One thing that has helped us over the last few years is the way we’ve combined cloud and mobile capabilities to help manage our costs. You’ve heard it before, move to the cloud, but we really mean it. We use the cloud in our company and we provide cloud solutions for our customers. Here are a few of thoughts that may help change your mind about cloud for your business:
You really don’t need all of those servers – move away from your on-site solutions to the cloud, where you don’t have to maintain servers. You can then stop having to scramble to find the funds for more internal IT resources.
Put all that data in the cloud – you can store and backup all your data to the cloud and it can be accessed anywhere. Simple as that, with security and disaster recovery built in.
Connect remote and mobile team members – if they don’t need to be in the office for that one meeting (you know the one, you drive three hours for an hour long meeting that could have been handled online, just to turn around and drive three hours back) keep that expense down by having them use cloud technology like hosted Lync (combined with a voice service it is even better).
Spend 15 minutes reading about the cloud this time. Big companies would not be using it if it was not worth it to them, it just often takes smaller businesses a bit longer to catch on, so right now you can get ahead of the game to help reduce that expense line for next year.