Imagine a scenario where you suddenly had a massive downturn in business. Maybe it is a general recession or some unforeseen material change in your industry, and everything turns in a matter of 90 days.
You wake up one day and run the numbers and realize that you won’t survive the year if you don’t start to shift your dollars around. The time for action is now.
What would your first cut be to “save” your business?
Perhaps you want to pour more into marketing, but you need to find the dollars from elsewhere in your budget with revenue retreating. Where would the money come from?
If you envision this scenario and instantly know what you would cut from your spending, you might want to consider doing it now! Why wait for a crisis to trim the fat?
In boom times, it can make sense to have extra expenses that serve more as experiments and write-offs than the actual costs of doing business. But you can use this exercise to evaluate your expenditures and be proactive about keeping your business lean and focused.