Reviewing costs and choices (Reduce costs Now, Don’t, Maybe Reduce Costs)
The company’s founder Jim searched for cost savings in an effort to bring the company to profitability. He asked his team to research potential cost savings. Today there was time to review their plans and his.
Adam provided information on less expensive materials but found it would lower quality a lot. Jim didn’t like that plan one bit.
Adam’s suggestion to find a less expensive warehouse was not successful. The competitive bids presented no savings. “By the time I relocate the product, pay the startup costs for the warehouse, get things going again, we won’t have saved a dime. Not only that, but I can’t stop our warehouse until I’ve got the 2nd one up. That means double payments for at least two months. That will burn cash.”
Sharon’s look to lower-cost marketing/social media ideas seemed good but complex. Adjustments would take time and they didn’t know how long. Time is money after all, and with a volunteer crew, Jim was concerned about them getting things done.
Just reducing costs would not make them profitable. Jim prepared to talk to the team about his conclusions.
Jim’s Choice: Don’t try to reduce operating costs now – Removed Reduce Costs Now
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