Production Company Expenses: Cuts and Investments
Whether you manage a fledgling production business or a large company, you have to adapt to the times. It could be a slow period when cuts to your team and budget are made, or a bountiful year with profit enough to invest in new opportunities. Service companies mostly conduct business in a buyer’s market, which means making the right cuts and investments prior to a change in the economic tide can mean the difference between success and failure.
Sometimes, cuts and investments can be made in one decision supported by valuable information. Research and education are valuable allies; capable of keeping you ahead of trends instead of following them. The production/service landscape functions on a bell-curve and the goal is to equalize the decreases while simultaneously improving the increases as much as possible. Preparing for an increase or decrease in business includes adjusting your business strategy, efficiently managing your staff, and consolidating assets.
Brick and Mortar Stores Are Alive
Contrary to contemporary trends that suggest business is moving away from physical locations, a base store could bring in more clientele than you think. Production companies can work virtually, offering their services and wares online and saving themselves a storefront cost. However, online stores won’t provide you a competitive edge – your customer service.
A top factor affecting customer advocacy, customer service is best felt through physical meetings. What sets you apart from the fray is your charm, your staff, and your store’s atmosphere. Physical locations may feel outdated, but you can utilize every sense to convince a potential client you are the best production choice. They may have to physically appear in the store, but that commitment level is already proof they are not just browsing. All that remains is wooing them with your exceptional customer service.
Reassess Your Team
Working alongside the right team is critical for success, particularly in smaller production companies. The smaller the team, the more important every individual role is. If business is just too slow, then you may have to make some permanent cuts to your team. Maybe there is an underperformer who is hindering business, or too many employees sharing a single responsibility. Regardless of the hindrance, you have to make the difficult decisions to stay within budget.
You probably have a subconscious performance list of your team. When the budget becomes too tight and other solutions are exhausted, you have to terminate the underperformer. Their performance may be due to personal issues which is why you’ve allowed them to remain, but eventually costs have to be cut. The longer you go without cutting the below average performers, the more they drain your budget and performance ability.
Reduce The 8-Hour Workday
42% of adults work a 40-hour week, but research has revealed the ugly truth about 8-hour days: A little less than 3 hours of it is spent being productive. Those numbers would give any efficient manager a heart attack. There is no substitute for working hard, but working smart saves money. It’s natural for a company to reduce employee hours when business is slow, but modifying them for the busy season may increase efficiency.
As part of a production company, you create and disassemble someone’s vision within strict parameters. It requires rapid continuous work from many hands. According to the 8-hour workday research, however, your crew may not be as efficient as they could be which costs you money. Make some alterations and manipulate the employee schedule so they work shorter periods with breaks to keep them invigorated. You can tailor your employees’ schedules to maximize efficiency and decrease cost after observing different schedules.
As a smart production manager, you want to decrease costs while simultaneously increasing performance and profit. By emphasizing your customer service at a traditional storefront, modifying employee schedules, or removing underperformers, you have benefitted the company. The real enemy is indecision. Indecisiveness can lead to failure quicker than other economic variables, so you need to take control and make tough, managerial choices.
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