Cost-benefit analysis is vital in determining where to cut costs. In this video, learn how to begin analyzing the specific benefits tied to costs in your business.
- Now, when you're thinking about which costs to cut, … there is one other ingredient that must be remembered, … which is what about the income that it generates? … So compare each cost area with the income it generates. … So for example, you might have … quite a lot of sales people, … and you might be thinking … we could cut some of those sales people. … They're expensive. … But actually, maybe they're worth it, … and maybe that top paid salesperson, … who you resent because he or she earns more than you, … is well worth it. … They're probably bringing in 10 times their salary. … So you always got to look at the value as well. … Advertising you can cut. … Training is always very tempting to cut. … But remember, it might be generating … more than it's costing. … One would hope it does. … It might not, though, … so it's really important to do the math. … So work out whether it's worth it or not. … And I'm going to come back to that later … of how do you decide where the sweet spot is …
- Different cost areas affecting your business
- Comparing cost vs. income
- Enhancing your work environment
- Focusing on the most important management tasks
- Getting better deals on raw materials and labor
- Recognizing your optimum quality level
- The hidden costs of subcontracting
- Where to avoid cutting costs
- Top ten cost-cutting actions to take
Skill Level Beginner
What to expect1m 3s
1. What to Reduce
2. Reducing Labor Costs
3. Costs Other Than People
4. Top 10 Tips
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