If your company lacks the cash to survive the next six months, think about these cutting back on these nine expenses.
"The First 90 Days" is a series about how to make 2016 a year of breakout growth for your business. Let us know how you're making the first 90 days count by joining the conversation on social media with the hashtag #Inc90Days.
Stocks have plunged since 2016 dawned. It is unclear whether this plunge is a result of investor fear or its cause.
But one thing seems certain: The uncertainty could spell trouble for companies seeking to raise capital from investors.
If you run a company that was counting on raising capital that has been delayed due to these market conditions, you will need to tighten your company's belt.
How should you do that? Here are nine costly items your company can live without.
1. Money-losing product lines.
If you don't know which products are profitable and which are losing money, you need your finance department to get you those numbers as fast as it can.
And once you know which products are losing money, you need to figure out how to cut those product lines and how much cash you'll conserve by doing so.
2. People who don't fit your culture.
Most companies make some bad hiring decisions. If your company has a strong culture, odds are good that the people who don't fit are sucking up the time of the people who do.
Perhaps you've been delaying the process of managing the misfits out of the company. A cash crunch is the perfect opportunity to put that on your immediate to-do list.
3. Company parties.
Whatever the cost, any holiday parties you may have planned in the months ahead are great candidates for being cut.
You could offer a less-expensive alternative -- such as having a party in the office to which people bring their own food and drinks (the ones your lawyers will allow).
4. Offsite customer conferences.
You'll face an outraged sales force when you suggest cutting the offsite customer conference in Cancun.
Perhaps you can suggest that holding that meeting with customers at a local Hampton's Inn would be a better investment.
And it might just ensure that the company survives until it can afford to go back to Mexico for such conferences in the future.
5. Car service.
Do you pay for employees who work late to get car service to take them home? This is a cost that you should consider shifting to your employees.
6. Free food.
If you give your employees free meals -- an expensive perk that seems quite popular in Silicon Valley -- you ought to calculate how much it would cost to shut that down and how much cash you could save if you made employees bring their own food -- or buy it at cost.
7. Moonshot R&D.
On February 1, Alphabet announced that it had lost $3.6 billion on the R&D moonshots it calls Other Bets.
If your company is making any investments in products that have a slim chance of paying off in the near future, this is a great place to stop the bleeding.
8. High executive salaries.
If you do all these things and you still don't add at least six months of breathing room before you run out of cash, it is time to look at yourself and your executive team for cost savings.
That's right, you are going to need to take a cut in salary and bonus. And if you can get your executive team to do that and it's still not enough, you may need to ask your employees to follow suit.
9. Expensive office space.
Finally, if you lease expensive office space, you may need to look into whether it is possible to break the lease and move to less expensive space.
This could be a major disruption to your operations -- but over the long-run most companies do not need fancy office space to do the work that customers require before they reward you with their business.
If you decide to cut these items, the way you do it matters. You ought to get your company together and explain in clear terms why the company needs to cut costs. how it plans to do that, and when the cost cutting will be over.
If you don't know when it will be over, tell people how you will decide whether more cost cutting is needed and when you think you'll know.
Unless you're transparent, odds are good that your best people will leave and your worst ones will hang on for dear life.
If you cut these nine costly items, chances are better that the resulting short-term pain will allow your company to survive until the dawn of better days.
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