From the course: How to Protect Business Profits in a Financial Downturn
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Cutting costs
From the course: How to Protect Business Profits in a Financial Downturn
Cutting costs
- The first question asked when cutting costs is where are you spending your money? Often times in good years, companies are too busy making money to ask why or how? But meanwhile, things like travel and entertainment or MRO, which is important for manufacturing companies, it stands for maintenance, repair and operations, those kinds of things can get a little out of hand during the good years, but no one cares because the business is profitable. In a recession, it's really important to know where you're spending your money and to take a look at those categories. Once you know where you're spending your money, you can do three important things. The first is you can begin to bucket your expenses. You might want to put them in fixed costs that are constant, or variable costs that go up or down with your business, like human resources or marketing, or travel and entertainment. Once you put those buckets in, you'll…
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