009 - THE THREE LEVERS

You have three levers. Increase your revenue, improve your gross margin, or decrease your costs. Let's say your business is struggling at the. You have three levers that you can pull immediately to give you a better chance of survival. The first is increasing your revenues, and you can do this by selling more product to your existing customers, finding new customers, or maybe even raising your price.  Now all of this will lead to an improvement in cash flow and to your bottom line. You may want to enter new geographies, launch new products, or enter new markets. Al. To improve your gross margin can be a little bit tougher. So your gross margin is a function of the cost of sales. And what I mean by this is, let's say you are someone that sells candles. You may sell your candles for 10 pounds, but you are buying them from your supplier for five pounds. This leaves you a gross property of five pounds and a gross margin of 50. What you may want to do is negotiate a better price from your supplier or maybe get them to reduce the quantity of wax they use in the candles, which hopefully also reduces the cost of that candle. It's not simple to improve your gross margins, but it's definitely something you should look at. Decreasing costs can be really emotive, especially where head. Is involved. Ultimately, there are ways of handling this in a way that is beneficial to both you as a business, but also thoughtful towards the employee.  You may want to reduce the number of days, or you may want to reduce salary costs as opposed to simply letting go of people straight off the bat. But you should look at every line of your business, look at all the products that you're buying as a SaaS service. Do you need all of them? Are they being used on a daily base basis?  I came across a business recently at Series B that was spending a quarter of a million pounds a year on monday.com. That's a lot of money to be spending on effectively a spreadsheet. So look at those levers, see where you can improve your cash flow and your bottom line.  In December of 2022 I released a list of 100 lessons I'd learnt the hard way operating as a CEO & CFO across multiple ventures from startups to scale ups to SME's. I had more than a million impressions on that post, thousands of comments and re-shares and many messages asking me to expand on these points. I'll be releasing a new episode every day for 100 days touching a little further on the headlines. Only a minute or two a day, and at the end you'll know my full list!