Tired of closing in the red, or just barely scraping into the black with almost no profit? How about running a quick financial analysis? That way, you can optimize expenses and boost your profit margin!

But how do you know where to cut costs, and where to increase investment? The methodology below is used by major consulting firms. Known as “Fit for Growth”, , this methodology helps companies reduce their expenses by cutting unnecessary costs, optimizing necessary ones, and investing in the areas that will actually drive their business forward. Tudo se resume em saber o quê, como e porque precisa cortar aquele custo, sem sair demitindo todo mundo e perdendo a qualidade ou diferencial que seu estabelecimento possui.

To get started, have your income statement (DRE) on hand — ideally an annual one, so you get an average of all your expenses — and be clear on your business's positioning and strategy. That way, you can focus on your brand's strengths, your expense structure, and financial reorganization for healthy growth. It might not sound like much, but it will lead to a cultural shift in your company and greater competitiveness in your market! Companies that commit to adopting this methodology as part of their business culture have seen profitability increases of up to 30% in the medium term!

Ready to optimize your business? Then let's get started!

Strategic decision: I want to optimize my business!

The first step is knowing what your goal is. Por exemplo, “quero maximizar a margem de lucro do meu restaurante com mais vendas”.

The second step is identifying the strengths of your business that you want to optimize or build. Digamos que você quer ter um atendimento mais rápido para aumentar a rotatividade dos clientes sentados nas mesas do meu restaurante durante o almoço.

The third step is creating a clear investment agenda that directly impacts your goal, focused on the outcome of optimizing your processes. In other words, say you researched and decided to invest in an automation system where waiters carry a mobile device in hand, and the order goes straight to the kitchen the moment the customer places it. This way, the speed of communication between waiters and the kitchen increases exponentially.

The fourth step is reorganizing your business structure to prepare it for growth and rising demand. Neste ponto é muito importante implementar um modelo organizacional sólido. Assim, os processos e sistemas utilizados vão ser usados ao seu potencial pleno, fazendo com que o crescimento ocorra sem interrupções. Pode começar fazendo reciclagem de treinamentos com os garçons e pessoal dos caixas; rever todos os processos e tarefas dos cozinheiros nas horas de pico; e analisar o histórico de vendas, priorizando o que é necessário.

The fifth and final step (hang in there, almost done!) is building a human resources and marketing culture so these new processes and mindsets are absorbed by your team and your brand. Dessa maneira, o seu negócio evolui enquanto cria o diferencial do seu objetivo. Neste caso, ter time e estoque suficientes para poder atender os clientes, cuidando dos equipamentos utilizados pelo sistema para evitar lentidão, ou problemas na operação do seu restaurante.

All right! That's a lot of theory and examples so far. But now it's time to roll up your sleeves and start with the basics: your business's expenses.

The analysis for optimizing your business's finances

With your income statement in hand, you'll need to split all your costs into 4 categories:

• Lights On: this category covers the basic expenses and costs a company needs to legally operate in the country — in Brazil, for example, that would be your accountant, water, electricity, phone, and so on.
• Specific Costs: this category includes what you need to operate in your business's specific market — for a restaurant, that might be a cost like gas, while a technology company would have server costs.

In these first 2 categories, the idea is to reduce and optimize all costs and expenses as much as possible, since these are the essential basics for keeping your company running in the market it operates in. Try saving on energy and water through awareness campaigns for your staff and customers, and try finding suppliers who can deliver good service at a lower cost without sacrificing quality.

• Differentiating Capabilities: in this category, you put the costs and investments that create a competitive edge over the competition and the market your business operates in. For a restaurant, this could range from a more powerful, higher-capacity oven or griddle, to an automation system that speeds up service, to eye-catching decor.

The goal in this category isn't to cut back, but rather to optimize through reinvestment, incentives, bonuses, and infrastructure using the money saved in the other 3 categories.

• Extra Fat: this is where you put everything extra that your business doesn't need to operate and function in its market — things like cable TV in the office, excess inventory or products that have nothing to do with your menu, unnecessary employee perks like excessive happy hours, and so on.

The purpose of this category is to flag everything extra in your expenses and costs that has nothing to do with how your business actually operates. Simply cut 100% of it, so you can reinvest in category 3!

Once your expenses have been split into the categories above, you should already start seeing savings and an increase in your profit margin (phew, finally some good news!). By applying the methodology holistically — investing in the right places, optimizing where needed, and cutting what's unnecessary — you'll undoubtedly reach your goal in the medium term. With this edge over the competition, you'll need to get ready for healthy growth!

Go carefully so you don't cut where you shouldn't. Start by setting simple goals, such as:

• Reduce costs in categories 1 and 2 by 15%;
• Negotiate discounts of 5% on expenses;
• Cut 75% of the unnecessary costs in category 4; and
• Invest in the strengths of category 3, to reach your goal.

Tell us what goals you've set for this half-year, and which parts were the toughest. I'll personally reply with tips and suggestions on what to do, or what you'll need to keep an eye on. Let's grow together!