Everyone has their own view of a good leader. I think a good leader is one that can help you avoid the banana peel that will ultimately cause your demise.
One of the responsibilities of good leadership is to anticipate and resolve potential problems with clear cut solutions.
Deficits are among the concerns leader have to face and require firm hold on a budget in order to be able to pull oneself out of the mess, sometimes caused by inefficiency.
Three questions need to be asked that are important when making decisions regarding a negative budget. Is this something that I need? Can I make the process less expensive and how? Is the allocating of cash required to offset the need, justified?
A quick fourth would be where do we get the funds? Are we certain that the money is available and how long will it be? Is it enough to just say, "costs are going up everywhere, we need more money" or, is that a copout that leads to habitual unresolve and red-bottom lines. What I'm suggesting is fine-tuning. Sometimes it is a little of both, negligence and costs spiraling out of control. How do we look at cost? Is it based on what we spent last quarter, or season, with a percentage of increase? Or rather, is it our increased usage that has resulted in the higher costs. We must do the math. Then ask, what measures are we taking to correct the situation, if possible. Can the need for more money be a potential risk to your operation?
Overindulgence leads to inflated budgets and each area needs to be evaluated as to what is the cause and, is there a need? We should always ask, what can we cut out. For example, is this something we need, as sometimes change like consolidations, make items or methods obsolete. Business courses that I have taken teach-- "do the ends justifiy the means?" Never over extend especially, in an economy such as this is.
Survival is what everyone that I know in business is talking about right now. Some of the ways that they have dealt with increasing costs and low revenues is to cut down staffs hours, saving when they can, on utility expenses. Some have even changed their salary offerings, and have cut back on vacations and bonuses just to be able to hold on to their personnel. Others, have closed shop one addional day during the work week. Extra curricular activities have been suspensed, and at other times, events have been consolidated, with a realiziation of cost savings, all in an effort to reduce an inflated budget.
How do you keep from having a deficiency in the first place? A good leader has no deficiency in judgment, having a complete understanding of the cost at hand, vs the potential income having also an anticipation for increases and other needs like replacement costs. I knew someone that was so concerned about over-draft penatities, that she, not having the ability to reconcile her account, always made sure that the deposits were larger than the debits-- (checks written). She never bit off more than she could chew. I think that is sound judgement, keeping ahead by anticipating your need. We should all learn to "live" within our means, cutting back when we have to. Overextending has been the demise of several companies in this area, which in trying to grow too fast, failed. This is how we are to survive.
Look before you leap, what are you proposing to do and how much will it cost, and do you have the funds? Basic business procedure.....Before you attempt to grow something, how successful have you been? What did it cost you, and that means each and every detail and full exposure to every line item. How much more can you expend in it's development? And, is this a good time to do so. Will it break the bank. What is the risk? Is the risk worth it?
I heard that the cost of oil will be skyrocketing. I'm prepared to bring down the dial even more. My friend places plastic around her windows and even cuts drafts from around her doors. I use lined and thermo drapes, and door draft stoppers. Rooms that are colder, can be closed off. Outside walls are colder, furniture can and should be more centralized. Rugs against doors, and extra warm materials like carpet, pillows and throws absorb heat in a structure. Carpeting is warmer than hardwood floors. Electricity is at an all time high. Baking at night when the house is cold, as opposed to a sunlit day, is another way to add comfort without largely increasing costs. It used to be that you could set your tank to create hot water, at less peak hours. Making sure your humidity level is adequate, is another way to help. The list is long. Wasting water is also a huge concern in most homes as the cost sky-rockets.
It is the little things that add up. My mom used to be very careful about closing the door, right away, not allowing the heat to escape. Years ago, people used draperies to cut drafts in the home. Your probably all familiar with the canopy bed, the four posts and their coverings. She ran a line through the house to dry clothes. They do sell indoor clotheslines still. Have we become more efficient or have we become negligent and wasteful in our homes businesses and office. Efficiency is what needs to be acquired, and that means all of us must work at it, being on top of everything that we consume.
We can pay the fee of our errors or prevent it in the first place, by being frugal and watchful. This takes honesty and integrity, intellect, and determination to succeed, by righting the wrongs, and with clearcut directives, leading with strength. Eliminating or cutting back, will be necessary for most of us, business or not. It will require the use of the word No, which we do not for the most part, want to hear.
A good leader knows that it is not a good idea to increase costs when you have a deficit budget, and risk taking should be avoided at all cost. If you are a leader, then you know that leading is very difficult and sometimes places you in an unpopular role. A role, that may require all the courage that you may have. So ask yourself who is depending on you and lead with confidence, one step, one hour, and one day at a time.
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