Looking for smart ways to trim spending at your business? Here’s advice on how to get started.
Q: What are some key ways to cut costs for my small business?
A: When a business owner asks this question, my first response is, “Is this what’s most important right now?”
To figure out the answer, I’ll want to know if there’s been an in-depth analysis of the company’s financial statements and key performance indicators, and the relative profitability of products or product groups, along with customers or customer groups, salespeople or sales channels. I ask for this information because the need – as opposed to a measured and rational desire – to cut costs is an indication that something’s not working with the business model.
Don’t get me wrong, though – reducing the amount of money flying out the door is a good strategy, and once I’m sure that slicing the fat from a budget makes sound business sense, I’ll use the following checklist to start tackling costs.
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