Having trained formally as an economist and now operating as a business mentor in the Jerusalem region, I have seen this scenario upteen times. Either because of a cash flow crisis or because the CEO just feels like, a demand is issued to cut costs.

Depending on the size of your organisation etc, there almost always some likely candidates for the chop – the employee nobody cares for, that extra advert, the new equipment that can be purchased next year, a few accounting tricks with the pay packets, and so the list goes on.

For a more detailed look, you can check out a set of ideas from biz guru Barry Moltz; “10 ways to reduce expenses right now”.  All are worth considering. And most can be summed up under the theory of trying to get ‘more for less’ from your suppliers.

However, while not ignoring the need to control costs, let me point to another solution. How about concentrating on upping expenditure – should I say, investing more resources – in marketing and sales! What would happen if your company took a relatively small sum to beef up those people who go out and bring in real money?

I remember years ago hearing of somebody who bought a large but failing retail outlet in Hong Kong. The new owner’s first move was to increase salaries to baseline employees. The cash started to pour into the tills.

In contrast, I know of one dominant subsidiary, part of an international concern, where the managers overseas are driven by ‘bottom-line numbers’. The default thought process is that if pre-tax profits keep falling, than costs have to be hauled back. Little time is wasted on creating and implementing a new strategy to meet changing demands.

And it is that concept – strategy building and seeing it through – that I stress to my customers as their business coach. Many try to push me back, because such a step can draw out their own weaknesses. However, cost savings only take you so far. Generally, they do not create wealth.

So next time you want to improve your cash flow, try thinking laterally. Consider raising expenditure if you can see there is a reasonable chance that it will provide you with long term additional revenues.