5 cost-cutting strategies.

Position:Finance - Brief Article
 
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  1. Do the math. Look at percentages rather than dollars and cents. If your expenses are chewing up your profits, you need to take action. There are two ways to improve sagging profits: sell more or cut costs. However, if revenues and expenses grow at the same rate, selling more won't fix an anemic bottom line.

  2. Analyze your products/services. After having done the math, determine which products or services are most/least profitable. Consider cutting those that are least profitable, retain and invest in those that are most profitable. Download a worksheet to guide you through this at www.toolkit.cch.com/text/P06_7520.asp

  3. Target variable costs. Cut costs that fluctuate, such as advertising and salaries, before cutting fixed costs, such as equipment and rent. Note: cutting fixed costs is often more painful than cutting variable costs.

  4. Question everything. Look at your expenses. Ask yourself how each expense adds value to your...

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