Anyone can cut costs. Knowing which costs can be cut, delayed, or marginalized is the trick.
ADAGE
Pinch the Right Pennies
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RESPONSE
Anyone can cut costs. Knowing which costs can be cut, delayed, or marginalized is the trick. Money is always a scarce commodity. A low-cost alternative is always there—you just need to look for it. Find it and assess it before making your final decision. Ask yourself, “Is it really necessary?” before you select an expensive solution. Beware the Costco syndrome—do not buy two years worth of toilet paper to save 20%. Always keep unit cost aligned with opportunity cost. Never let a CPA tell you which costs to cut. Always rely on your operations folks to make those decisions. Discernment is key to cutting the right costs. Across-the-board spending cuts indicate poor leadership. Some costs can be cut more than others, and in some cases you may need to increase a budget.
SCRIPTURE
Proverbs 21:5 (ESV) The plans of the diligent lead to profit as surely as haste leads to poverty.
Hebrews 5:14 But solid food is for the mature, for those who have their powers of discernment trained by constant practice to distinguish good from evil.
QUESTIONS
How do the Scripture(s) apply to the business adage?
There is a contemporary notion that employers have to cater to Gen X, Y, and Z employees with all kinds of benefits, time off, offices, perks, etc., in order to make them happy. Is this necessary? What are your thoughts?
Should work be fun? Should you invest in things that other people tell you will make your employees happy? Why or why not?
Is cost-cutting something you learn from a textbook or from experience? Explain.
Should CPAs be involved in making decisions related to cost-cutting? Why or why not?
Is your employee’s happiness your responsibility?
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