If you could change most of your fixed costs, to variable costs - in every function - how would that transform your business?

(no matter the current size of your business)

  • Higher profits, due to avoidance of unecessary overheads costs at times of lower supply in the monthly or annual demand cycle? 
  • Take the ceiling off capacity, i.e. allow potential rapid expansion? 
  • Allow you to get work executed in parallel instead of in series due to the flexible capacity, therefore bringing in revenue sooner with the lower remaining fixed costs? 
  • Be able to use faster delivery as a competitive differentiator? 
  • introduction of new ideas, due to exposure to new practices, and more people even if at a fractional cost? 
  • Lower the "total cost of employment" i.e. removal of the costs of recruiting and exit over the demand cycle? 
  • Make it easier to demand higher levels of performance
  • Would it mean certain categories of other costs would automatically fall away? 
  • lower the risk of impact to the business through any sudden change in your staffing? 
  • Would it mean you could get new skills that you cannot justify employing full time, which would make a huge difference in the way you could run many functions in your business?
  • would it make your business far more resillient against the risk of a sudden change in your Customer base?
  • would it mean you could operate functions/positions in your business which do not currently exist, but you need? 

Making these changes aren't necessarily straightforward if you haven't done them before (essentially since it is a change!), however for many businesses incredibly worthwhile.

This requires a new way of thinking, new ways of managing work which are non-traditional, specifically ways of allocating and tracking work, as well as related supplier discovery (suppliers including individuals), engagement, work assignment and information distribution, security/confidentialy, visibility and control.

Having said this, though, certain types of changes are more about a new mind set, and not necessarily about a significant cost to change. Furthermore, some changes can be implemented quite quickly. 

Ultimately it's a way of thinking, supported by a different recruitment method, and technology.

If this could be highly relevant to your business, contact us to help you work out and calculate the effect on your P&L, and think about how it could be done, and what it will take to do it.