Cutting the Right Costs
photo credit: SqueakyMarmot
There are proper way to cut costs in your business, because believe it or not, certain cuts are worse than no cuts at all.
When cutting costs and looking the difficult choice of letting some people go, make sure your making the right choice for the better of the company. Rather then leting go the 20 year veteran and replacing them with a 20 year old part time employee, let go of some of the people lower on the seniority scale. If Circuit City had followed this advice, they might have been able to stay in business.
Do you have any suggestions for making good decisions in making cuts?
SeoCracked.com on January 28th, 2009 7:26 pm
“If Circuit City had followed this advice, they might have been able to stay in business.”
I agree! ;)
Mark Bantigue on January 28th, 2009 11:14 pm
some cuts do not have to be cuts at all. shifting from fixed costs to variable costs can make a huge difference. it is like hedging against slumps. however, when the economy or business picks up again there is a point when going back to fixed costs is better for the bottom line. just do the math. economies of scale point.
one should never cut on marketing because it affects the top line. however, advertising through the clutter might make your marketing $ have no effect. try web 2.0. it’s cheap / free. it just takes time and effort to write about value of your product/services and what problems they solve.
lastly a making your operations efficient can cut costs dramatically. admin and operations are cost centers. no need to cut on them. just making the flow of operations smoother, more efficient, multi-tasking, and ‘hitting several birds with one stone’ approach can cut back on costs without giving up key operation and admin areas.
best wishes this 2009.
innovate!
Dan on January 29th, 2009 7:48 am
Well,
First you have to track productivity – see who’s productive and who’s not. If you find unproductive stuff you have to let them go …
If all people are productive (or doing their best to be) than I’d say “now we have to increase our efforts with 30% in order to have the same results like in 2007 for example” . Who’s willing to give (do) more for the same benefits is welcomed. The others, well …
cassy on January 29th, 2009 7:19 pm
its is really important for the company to know how to do the right cost cutting and knew what are the priority,and the most important thing is to balance the cost of the operation so that the company will stay strong and productive!
Barry on February 2nd, 2009 7:11 am
In business as in life, it all comes down to what we perceive as value.
Sometimes cutting some to save the whole is as necessary as amputation is to save the individual. In the process though one must not simply count the beans, but see the potential for benefit those beans provide. To continue the analogy, some beans can be easily seen for their inability to produce a future harvest regardless of how inexpensive they may be. Others may carry a higher short term cost, but will surely provide the harvest when planting season comes.
Food for thought ;-)
home based business on February 2nd, 2009 7:51 am
I think it is smart to cut based on results. I think most cuts are determined by business perfomance. If a certain part or product isn’t doing well, the people in that branch, who are responsible for its success should be looked at first.
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