In good times, business is easy: Demand and investor appetite are soaring. But what about bad times? Entrepreneurs need to walk a tightrope.

In good economic times, decisions to increase costs are made without giving it much thought. The economy is booming, interest rates are low, and, as a consequence, investors are eager to deploy their LPs’ excess capital.

In dire times, however, investor capital evaporates even faster than your sales pipeline collapses. Your only option to stay afloat in such times is to manage your costs.

Gloomy, huh? Yes. People always think that entrepreneurship is only about growth, success, and glamour. From my own expertise as a founder, I can assure you it’s not. There are at least as many moments of doubt and hardship in an entrepreneur’s life as there are successes.

In this article, let’s look at a core dilemma that might sound familiar to many fellow entrepreneurs: Dire times require you to cut costs, and at the same time, you need to step up your sales activities.

Reducing Your Costs: Doing More With Less

Unfortunately, reducing costs almost always means reducing headcount. That is never pleasant, but it’s required sometimes. At the same time, think of all the organizations you work with, no matter how small or large they are. How many times have you come across people who don’t do anything but keep their chairs warm? I think it’s fair to say that most organizations could cut their headcount by 20% without consequences on output. Don’t get me wrong, it is still unpleasant to reduce costs.

Reducing your costs means doing more with less. That doesn’t mean you will have to work double shifts. It means you will have to focus on what matters most and streamline your processes. That’s not a threat, that’s a chance.

Increasing Your Sales Activities

At the same time as you cut your workforce, you need to step up sales activities in dire times. Even if the economy is not doing well, you need to do everything you can to grow your business. And even if you don’t sell more while the economy is in shatters, at least you will have a full pipeline once the economy recovers.

Sales activities require lots of effort and time. Yes, you need to make this effort with fewer resources than you started with before the cost-cutting.

There goes your dilemma. Because it’s an illusion to say you can do more sales with automation. Marketing works very well with automation, but following up with qualified leads, giving product demos, and answering prospects’ questions still involves people who understand your product and also prospects’ needs.

At the same time, who said you need those people helping you in sales permanently on your payroll? Maybe you can hire a contractor with great connections in a new vertical you’re trying to attack. If your product doesn’t solve a problem in that vertical, you can end the contractor’s mandate without having spent tons of money. If the new vertical helps grow your business, you can always hire that contractor full-time.

Conclusion

Entrepreneurs walk on a tightrope all the time. If you’re not cautious enough in dire times, you’ll fall off the rope. But if you’re cautious all the time, you will not be able to grow your business sustainably.

There is no right or wrong way to manage this dilemma. The important thing is that you are aware of this dilemma, and that you do whatever you can to grow your business instead of complaining about hard times.