Right now small business owners throughout the country are introducing all sorts of cost-cutting measures, most of which are in response to the weakened economy. Cost-cutting itself is necessary and smart, but sometimes small business owners panic and go about it the wrong way. So here are three common cost-cutting measures that should be avoided.

  1. Shying away from globalization. Going global may be expensive, but emerging markets are ripe sources of new revenue.
  2. Cutting back on technology. Many companies are slowly reducing their technology investments or at least letting them stagnate, but technology is how businesses keep their fingers on the pulse of their customers’ needs and wants, which in this business climate is becoming increasingly important.
  3. Replacing talented, growth-oriented employees with cheap, cost-saving employees. Talented people are crucial to innovation. It may be financially convenient to replace your pricier people with their more cost-effective counterparts, but with what smart, growth-oriented people bring to the table, that would be unwise.

Focusing on growth as much as possible, even when you’re trying to cut back, is key to surviving tough times and coming out on the other end a winner.  So carefully analyze exactly what (or who) it is that helps your company grow, and keep it intact. All other measures are fair game. 

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