Difficulty: Moderately Challenging
Step1
Define the star. Ask yourself what is the most important thing that your business model needs to succeed. That is your star. If you are a drug company, then the drugs you are currently developing are your stars. Define the star for your company. Usually it is obviously the products you are planning to sell. Make sure you do not have other products that even when they come to fruition will have too slim a profit margin. Collect your basket of winners; these are your stars. Focus on them, and cut developmetnt of other products.
Step2
Cut people. This is tough to say, but eliminating salaries can make a huge difference to the bottom line. Take stock of everyone working on research and development. See how much money they make and if their position is justifiable to the success of the product. You can also do things such as cut everyone's salary by a small percentage. While you will not be popular, at least everyone will be employed. Also try hiring interns who are paid little or are working for college credit to add manpower (which may expedite the project) without sacrificing others. If a lot of people each have an assistant, consider combining two or three people to one.
Step3
Stay put. Travel is expensive! With higher gas prices, hotel rooms, airline tickets and more, it can be quite costly. Instead, invest a little money in video conferencing products. These are easily available at Circuit City, Best Buy, Costco, Office Depot and even Staples. For just a few bucks, you can save the expense of going to China by video conferencing with them. Communicating via the web will always be cheaper than communicating by phone, fax, or in person. Only take the trip you absolutely must, to seal the deal. And when you do take that trip, use online travel sites to get the best prices for your employees. Expedia, and Travelocity offer deep discounts when packages for air, hotel, and car rental are combined!
Step4
Lose the fringe benefits! Does your company provide snacks, sodas, endless supplies of paper, pens and other office supplies that tend to disappear? Take stock of what people truthfully need to forward the progress of your star product. Then remove all other items. Be careful to remove things people may not notice at first. This is important in keeping morale high. Look for alternatives. For instance, if your company provides daily breakfast at a cost of $100, reduce it to coffee. Then on Friday afternoon bring in a half-dozen pizzas for lunch. Saving $70 per morning and spending $50 on pizza gives you net gain of $300 a week or $15,000 per year. Again, this is just an example, but extrapolate from here!
