As a CEO, president or business owner, you are always aware of costs and keeping costs down in order for your business to yield as much profit as possible. After all, you’re in business to make money. Right? Cutting costs, when and where appropriate, is just part of doing business.
Business people are looking for ways to cut expenses, be MORE efficient, be MORE productive and MORE profitable.
But how do you know what expenses to cut?
Cutting costs just to cut isn’t good business.
Many CEOs, presidents and business owners make the costly mistake of making cuts in the business without being informed as to what impact those cuts will have in the short term as well as in the long term.
- You need to get out from behind your desk.
- Walk around your business.
- See what is going on.
- Think about what would happen if you made those changes.
The purpose of reducing expenses is to keep the company optimally profitable. In some business situations cutting costs is to actually turnaround or even, save the company from closing or being bought out. But you can actually destroy the business by cutting costs in the wrong places. Every company and circumstance is different as to what to costs to cut and when.
You may consider the bold step of working in different departments in your business. For example: sales, front office, shipping and receiving, accounting and any other significant area. Be the receptionist during lunchtime. Go ride with your sales force for a day. Make cold calls and go on sales calls by yourself. Take off your suit, change into other clothes and work the loading dock. Even go to the extreme of cleaning the bathrooms.
See what really goes on during the day so you understand the actions you are taking will reduce costs without jeopardizing the well-being of the business. Think about the unintended consequences of your actions. You may get an entirely different perspective about how best to run your business and if cutting costs is really practical.
One area many CEOs, presidents and business owners tend to frequently cut costs is sales and on-going training for employees. If you are in business to make a profit (and you are) it’s critical to maintain your sales force and continue any special training sessions for employees. Otherwise, how are you going to make profitable sales?
Same with marketing. You need to continually market your business. How else are potential customers going to know your business exists?
Never stop prospecting.
Never stop marketing.
Remember: Cut costs where appropriate. Don’t just slash to slash. If you do, you may lose the very essence of what your business is all about. What makes your business unique from others including your competition.
When cutting costs make certain those decisions keep your company in business, MORE competitive and MORE profitable.
To your success!
Ready to improve and grow your business? Have business problems or business issues to resolve? Need to talk strategy about business decisions? Talk with Howard! – 888-738-1855 – Howard Lewinter guides – focuses – advises CEOs, presidents and business owners to MORE success – MORE profit – less stress. Get MORE from your business! Talk with Howard: 888-738-1855.