Adrian Goodman.
Every pound saved delivers an immediate benefit to a floundering bottom line. Business consultant Adrian Goodman outlines his survival tactics for a business on the brink.
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WITH ALL the upheaval of recent years – Covid, the cost of living crisis, global instability – I have had countless conversations with business owners facing real financial pressure.
Their instinct is often the same: “We need to push sales.” But in many cases, that is the wrong move. When your business is struggling, forget the sales… cut the costs.
This might sound counterintuitive – we are all conditioned to believe that more sales equal more success. And in thelong term, that is true. But when your business is on the brink, survival comes before growth.
You don’t pour petrol into a car with no brakes.
Let’s break it down.
Making sales costs money…
Growth does not come for free. If you want more sales, that usually means investing in marketing, hiring a newsalesperson, outsourcing your social media or offering discounts. All of that takes cash – the very thing a struggling business does not have.
Even worse, there is a time delay. You might spend £5,000 this month on marketing that does not generate resultsuntil next quarter – and that is assuming it works at all.
If your business is already in trouble, you cannot afford to gamble on future returns. You need certainty. Youneed impact now.
Sales are not profit…
Even when those sales do come in, they do not all go in your pocket. Most businesses operate on margins. If your gross margin is 45% (which is decent), it means for every extra
£1 you sell, you are only gaining 45p and that is before you deduct your overheads.
So you might need to sell £10,000 just to produce £4,500 of gross profit (and that is assuming perfect conditions).
On the other hand, every pound you cut in costs is a full pound added to your bottom line. It is instant and it is guaranteed. If you save £2,000 on unnecessary subscriptions, renegotiate supplier rates or delay non-essentialspend, that £2,000 stays in your bank account. You do not need to wait for it. It is yours. Now.
Survival mode is about triage…
When you are fighting to stay afloat, your job is to stop the bleeding. That means cutting everything non-essential. Pause projects. Freeze recruitment. Delay expansion plans. This is not a forever decision; it is a tactical one.
You cut hard and fast so you can live to fight another day. Then, once the cash flow stabilises and the business can breathe again, then you switch gears.
That is when you fire up the marketing engine, hire that extra sales resource and go chasing growth. Butgrowth is a luxury you earn – it is not a rescue plan.
So remember this: sales are for growth. Costs are for survival. Know the difference and act accordingly.
If any of this hits close to home, do not wait until you are out of options. At PPX, we work with business owners to take control of their numbers, tighten up cash flow and build a plan that actually works.
No nonsense. Just clarity, action and accountability.
Adrian Goodman is managing director of PPX Consulting and author of Achieving Profitable Growth: Use the ‘Four Points of Control’ to grow your profit and your business. Available on Amazon.
Online Excel training at ppxtraining.co.uk/ practical-excel-skills/
Find out more at ppxconsulting.co.uk
adrian.goodman@ppxconsulting. co.uk
01536 904 886
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