Home
>
Strategic Planning
>
Cost-cutting Essential to Maintaining Profits

Cost-cutting Essential to Maintaining Profits

Why cut costs now?
Efforts are multiplying to cut costs wherever possible in order to achieve or preserve high profits. The resulting benefits for all of a company's employees should be obvious.

It should be obvious, but sometimes it is not. One of the lessons of the Dot-Com debacle is that many of the companies went belly up due to profligate spending by the executives.

Of course, you would like to achieve high profits by having a record-breaking sales year, but that may not be likely to happen this year given all of the uncertainties of the economy and the political situation. Levels of sales success are certainly unpredictable.

The level of sales, however, is only one ingredient in the recipe for success. You must also be interested in keeping your costs as low as you can, because the real number to watch is your profit, the difference between your income and your spending. Remember that this year can be more successful than last year even with lower sales if you can reduce your spending enough.

To increase profits, you can either increase your income, reduce your spending, or both. As your salespeople are aggressively searching for additional customers as well as seeking opportunities for more sales to existing customers, the rest of the employees can work on the other end: reducing costs. If sales are lackluster or even dismal, your cost-reduction efforts can ensure your survival. On the other hand, if sales are great, you can use them to achieve a banner year.

Get everyone involved
Everyone can participate in cost-cutting efforts. Here are a few examples:

Reduced travel ? Many meetings formerly held in person are now managed by video-conference or simply by teleconference. Perhaps even senior managers can reduce their in-person meetings from one a month to one per year.

Increased use of e-mail ? Communications that once took place in person or by phone are now routinely done by e-mail. Even faxes are beginning to use network connections rather than more costly telephone lines.

Economy of scale ? By combining the purchasing power of multiple sites, you can reduce the cost of routine purchases, such as uniforms, computers, and office furniture by obtaining volume discounts from your suppliers. Negotiating new leases for photocopiers and other equipment might save you thousands of dollars per month.

Increased utilization ? If you can increase the percentage of time each employee is doing productive work, you can save a lot of money. Encourage employees to use their down time either for gaining additional training or for seeking ways to improve the efficiency of their processes.

Seek suggestions from employees - Ask your people, "How can we accomplish the same thing for less money?" You will be surprised at the creativity they have. At my company, for example, in response to an employee suggestion, water coolers placed at strategic locations throughout the plant have replaced providing individual bottles of water to employees. This has already resulted in a significant savings per week.

Better use of copiers - Employees can save considerable copying expense by using color copiers only for final drafts and increase the incidence of two-sided copying.

How can we cut costs even more?
Everyone in your workplace can get involved in this process by finding opportunities to...

Improve your processes so that you can accomplish the same excellent results in less time, with less effort, and for less expense;
Eliminate waste;
Employ teamwork; and
Find ways to add value to what you are doing without adding cost.

Ideas needed
You need each employee and every department to bring forward any suggestion or idea on cutting costs. Create multiple ways of passing along each idea, such as:

Present it to your department manager;
Share it with any member of your Quality Circle;
Write it down and drop it in a suggestion box at your site; and
Call it in to a suggestion hotline (voice-mail).

Investments must continue
All of this emphasis on cost-cutting creates the danger of cutting too much. The purpose of all of these measures is to ensure your ongoing profitability.

Some things you should not cut. For instance, you must not cut expenditures your need for facility upkeep or upgrades or to keep pace with technological advances. Neither can you afford to cut back the service you offer to your customers. They must continue to receive the best service you can deliver, combined with the speed and accuracy they have come to expect.

In reality, these are all investments rather than costs. You cannot afford to neglect your investments in facilities, technology, and your people. The long-term costs would be too high.

* * *

Steve Singleton has written and edited several books and numerous articles on subjects of interest to Bible students. He has been a book editor, newspaper reporter, news editor, and public relations consultant. He has taught Greek, Bible, and religious studies courses Bible college, university, and adult education programs. He has taught seminars and workshops in 11 states and the Caribbean.

Go to his deeperstudy.org for Bible study resources, no matter what your level of expertise. Explore "The Shallows," plumb "The Depths," or use the well-organized "Study Links" for original sources in English translation. Sign up for Steve's free "DeeperStudy Newsletter."

best cleaning company Highland Park ..

In The News:

Smart home hacking fears overblown? Expert reveals real cybersecurity risks and simple protection tips to keep your connected devices safe from hackers.

MIT develops needle-free glucose monitor using light technology. Revolutionary device could replace painful finger pricks for diabetes management.

The ClickFix campaign disguises malware as legitimate Windows updates, using steganography to hide shellcode in PNG files and bypass security detection systems.

Researchers from Osaka Metropolitan University designed a 21-foot dome that combines aquaculture and hydroponics to create a self-sustaining urban food system.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

ChatGPT data breach exposes personal info of users through partner Mixpanel. OpenAI confirms names, emails compromised in security incident.

Android rolls out Emergency Live Video for 911 calls, letting dispatchers see real-time scenes during emergencies. Great for holiday travel safety.

Malicious Chrome and Edge extensions collected browsing history, keystrokes and personal data from millions of users before Google and Microsoft removed them.

Google's new Call Reason feature lets Android users mark calls as urgent before dialing, displaying an urgent label to recipients using Phone by Google app.

Medical history made as surgeons successfully restore sight to legally blind patient using world's first 3D printed corneal implant grown from human cells.

Data brokers aggressively collect your holiday shopping data to fuel scams and targeted ads. Learn how to delete your digital profile before 2025 starts.

Scammers are sending fake MetaMask wallet verification emails using official branding to steal crypto information through phishing links and fraudulent domains.

Learn what background permissions, push notifications, security updates, auto-join networks and app refresh mean to better manage your phone's privacy settings.

Criminals test stolen data by applying for deposit accounts in victims' names to prepare bigger attacks. Learn why banks won't share fraud details.

New study of 10,500+ kids reveals early smartphone ownership linked to depression, obesity, and poor sleep by age 12. Earlier phones mean higher risks.

A phone phishing attack compromised Harvard's alumni and donor database, marking the second security incident at the university in recent months.

AutoFlight's zero-carbon floating vertiport uses solar power to charge eVTOL aircraft while supporting emergency response, tourism, and marine energy maintenance.

A new phone return scam targets recent buyers with fake carrier calls. Learn how criminals steal devices and steps to protect yourself from this fraud.

New Anthropic research reveals how AI reward hacking leads to dangerous behaviors, including models giving harmful advice like drinking bleach to users seeking help.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Holiday email scams, including non-delivery fraud and gift card schemes, spike in November and December, costing victims hundreds of millions, the FBI says.

Holiday visits offer the perfect opportunity to help older parents with technology updates, scam protection and basic troubleshooting skills for safer digital experiences.

Swiss scientists create grain-sized robot that surgeons control with magnets to deliver medicine precisely through blood vessels in medical breakthrough.

Researchers exploited WhatsApp's API vulnerability to scrape 3.5 billion phone numbers. Learn how this massive data breach happened and protect yourself.

Travel companies share passenger data with third parties during holidays, but travelers can protect themselves by removing data from broker sites and using aliases.

Cost-cutting Essential to Maintaining Profits

Strategic Planning