There is no doubt in this economic environment that cash is king and tough investment and cost-cutting decisions need to be made to ensure that your business remains viable, for the sake of all stakeholders.
However, decision-makers who are worried over the stability of their company's finances should remember one simple truth: The source of your business's cash flow is your customer base.
What all of this boils down to is the need to make smart, informed investment and cost-cutting decisions that have both a short-term and a long-term perspective.
If a company is not careful, it may perpetuate a business death spiral: Cost-cutting impacts customer satisfaction and demand, which in turn impact top-line revenue, creating the need for yet further cost-cutting.
That vicious cycle results in a difficult position for any business to re-emerge from. Yet it can be avoided—by maintaining a customer perspective during these trying times.
Steps to Take
Although each business's model and situation are different, there are common steps for addressing the challenge.
1. Revisit your segmentation