Regardless of your business’s stature, the risks of cutting too many financial corners are prominent.
Companies face pressures to generate new ways of earning money and make things more streamlined. However, in trying to streamline efforts, companies can start to hack away at much more than meets the eye. Cutting finances has a number of impacts that everybody needs to be aware of, and these include the following.
Businesses must understand the legal context that surrounds every decision. Companies that are producing equipment that has to meet rigorous standards and health and safety are a great example. Providers of school playground equipment do not just need to comply under the RoSPA stipulations and health and safety laws, but there are also the moral components of not complying with these laws. In the context of child safety, improper equipment can cause damage to a child, or potentially worse. This means that there’s a double dose of trouble for any business because of potential legal action arising from improper equipment and practices, not to mention neglect.
Improper Hiring Practices
Many organisations look at their workload and measure the timescale based on the deadlines, but also believe that it’s necessary to bring people on board in the short term. Hiring temporary workers can be beneficial within the right context, however, it can be costly to train people up. This can be a very myopic approach for any company. Even those looking for permanent members of staff may find themselves desperate to find the right person instantly that they forgo a lot of the essential preliminaries. It’s always vital to carry out a thorough search of potential candidates to ensure that they are well suited to the role. Additionally, having someone that is a solid fit with the company culture is just as important.
Insufficient Customer Support
Customers deserve to feel valued, and if we start to cut financial corners, this filters all the way down to the employees that are on the front line. In fact, those employees will feel it the most. When employees are feeling demoralised, this can translate into insufficient customer support but it’s also going to make the customers feel like your business is not worth their time. Therefore, they jump ship and find a competitor. This is why customer support should be one of the most essential investments. Upgrading customer service technology or even utilising a more informative website with detailed FAQs can do a lot to keep a customer well informed and transfer a sense of autonomy onto them.
A Dire Financial Situation
The dangers of cutting financial corners will not only mean your business needs to deal with the legalities thrust upon it, but it will also give you a lack of financial savviness. Many organisations think that cutting finances means they don’t have to worry as much about the money. If anything, it demands more focus. Therefore, having a more measured approach to dealing with finances can make a massive difference. Cutting corners is always going to hurt your business and it could do so in more ways than one.