Two Radical Changes To Your Business That May Help You Become More Profitable!
1) Radical Tip 1 – Consider making work from home a more regular feature.
Obviously this depends on the industry you are in. If you run an airline, your pilot can’t work from home! But companies that have been able to continue most of their operations while working from home, should consider making it a permanent feature.
There are only two ways to increase profits, either increase your revenue or decrease your cost. Working from home can help with both. 1) Because there is no need to spend a lot of time commuting, a lot more hours can be put into productive work. More productive work equals more revenue. Of course, a monitoring system has to be put in place. 2) A large amount of money that is spent on office rent, electricity and a lot of associated infrastructure can be greatly saved. This greatly decreases cost. Working from an office today is no longer essential for SOME industries. It was relevant at a time when there was no way to do things digitally.
Yes, the office serves a place for social interaction and perhaps provides a psychological push to work. However, many companies have reported improved productivity and profits after they started working from home instead of before.
Some of these companies include Cognizant and Lenovo. Some companies like Facebook, Twitter and Google have already allowed employees to work from home for a long long time if they want to. This would NOT BE the case if work from home was leading to lost revenues.
Each case and industry is different, however, and you have to assess whether the change in revenue and productivity justifies long term work from home for your company and whether it is even feasible to do so.
Radical Tip Two – Hire Less Employees. Rely More On Automated Systems And Independent Contractors.
Having hundreds and thousands of full time employees has costed companies tremendously in the hardest hit industries. TREMENDOUSLY during this Pandemic. You have to give salaries but you can’t run operations. Even when you can run operations, customers are no longer there! This has shut down thousands of businesses already.
To avoid this in the future, move towards automation instead of people. This lowers your cash-flow risks and the impact of recessions, pandemics or black swan events that can derail your business.
Most successful Companies are going to move towards automating whatever can be automated. The companies that don’t do this will eventually get crushed. The only people that have job security are those who have skill-sets that CANNOT be automated and have a direct impact on the company’s profitability.
What if you have automated systems but you need manpower for specific tasks? In that case, your second step could be to get independent contractors rather than full time employees. As a company you have a lot of legal obligations towards full time employees that you can avoid if you hire independent contractors.
This is not to say you don’t need full time employees, it means you need to employ them strategically.
If you are bringing someone on full time and taking on their legal obligations, make sure the employees too have a vested interest in having the business succeed and are willing to give their best.
This is especially true if you are a business that has been hit hard by the crisis.
In that case, the only people worth keeping full time are Employee-Preneurs, that is employees who deliver high value and have an entrepreneurial mindset, not EMPLOYEES with a 9 to 5 mindset!