Don't kick the can down the road

CNNMoney has an article out today regarding businesses trying to figure out who they are and what they do during down economic times.

Now, if a business has to spend any amount of time trying to figure out who or what they are during any economic condition, they have to be concerned. But let's disregard that just for the sake of argument.

When businesses find themselves in a challenging time, among one of the things they do is cut research and development. The first item in the article discusses this, and it is very true. It's low hanging fruit and the immediate results of that research is not to be reaped. But the problem is that when the down turn ends, there are a reduced number of products in the pipeline to be rolled out.

Plus, it opens the door to your competition catching up and passing you. If you need to trim the budget in tough times, R&D is not the place to do so. All you do is kick the can down the road a bit without solving the initial problem.

If you do need to cut costs, find where the fat is. Before you do layoffs, can you discover if your people  are not focusing on the right things? Can their time and efforts be directed elsewhere to increase revenues or decrease costs?

Can your manufacturing costs be reduced just by improving the process your products are produced or assembled? Can it be done quicker and with fewer steps? Don't just cut corners by reducing the quality of your inputs (your customers can always tell).

At the end of the day, don't take the easy way out when trying to get through challenging times. Keep up the R&D expenses. Don't lay people off, instead better utilize their talents to get more for your bottom line. Find other ways to reduce costs other than just the quality of the inputs.

These won't guarantee your businesses survival, but when the downturn ends, you will find your business in a much better position moving forward.