When reviewing how to save money in your retail business, it’s important to carefully consider how each cost-cutting decision you make will impact your business. David Peters, Jewelers of America’s resident education and management expert, shares his insight on how to analyze cost-cutting decisions.
Use his tips to review your cost-cutting options to see how they will affect key areas of your business:
- Finances: Always balance costs saved against the limitation and risks associated with them. Peters says to ask yourself, “Does this cut in expenses contribute to the ability to achieve my long-term goals and vision?”
- Human Resources: Be mindful of good communication and employee perceptions. Cuts can lead to poor morale and unfocused performance. Cuts can also lead to poor customer service.
- Technology: Don’t eliminate technology because of costs. Instead, Peters says to look for options and service offerings that eliminate the need for company investments. Look for ways to upgrade your website and digital communications capabilities.
- Marketing: Don’t cut back on marketing, just refocus your money on more effective methods. Remember, competitors are reducing communications with their customers, so there’s no better time to fill the void.
Take The Tip:
To get professional insight into where you can cut -- or should expand -- your business operating expenses, participate in Jewelers of America's 2010 Cost of Doing Business survey. When you complete the survey online, you'll receive an immediate calculation of your financial operating ratios. Use these ratios to compare your business to jewelry retailers in your market segment, when the 2010 Jewelers of America Cost of Doing Business Report is published this summer. Click here for more information, and to find out how you can receive a free Report!