Cost Reduction - Part 2

Consider the Big Picture


Let's examine more closely why looking at the big picture is so important. For starters, the big picture gives you a wider view of your market and your business.

Clearly, good strategies are critical to making good business decisions. Poorly conceived strategies can haunt you. In bad times, strategies such as "slash and burn" are employed by the well intended business owner trying to save their. But, be careful.

The slash and burn approach is short term. It is reactive in nature and characterized by the wholesale cutting of people and programs across the board, without much consideration of the consequences. The approach is reactive because it comes from no strategy at all, other than cutting costs. Hence, the tactic often achieves a positive short-term effect on earnings, but commonly leads to disastrous long-term results. Why? Because short-term cutbacks are, for the most part, unsustainable.