“There is a limit to how much you can cut, but no limit to how much you can earn.”
The problem with cutting costs as a business model is that, once you have reduced your expenses and you are still not as profitable as you need or want to be, the only thing left to cut is morale. Asking people to do more with less is not a sustainable business model, especially if you rely on those people to also make your company profitable.
If the people selling and providing your services are also the people whose resources you have reduced, eventually their sales and performance will also diminish. If your response to this drop in sales and performance is to cut out more resources, in this case personnel, you are in a race to the bottom and, paraphrasing Seth Godin, the only thing worse than losing a race to the bottom, is winning it.
The path to success is a reduction in friction, not expenses. Cut the things out of your business that are slowing down your earners and keeping them from doing their job freely. If you reduce the obstacles in their path, they will perform better and will earn more money for the company and themselves.
Money buys you the freedom to streamline your processes and make them more efficient, not to cut unnecessary costs, even if that is a byproduct, but to reduce friction so that your team has more freedom to drive the business forward. They will be happier, your customers will be happier, and the company will be more profitable. Profit is the result of a team that wants to and is allowed to be successful.
Unfortunately, this puts you, the leader, in a position that requires you to actually have to lead people, instead of managing numbers.
“As in life, so too it is in budo. As in budo, so too it is in life.”