Jason Schenker - Strategic Cost-Cutting: How to Improve Profitability in a Downturn

WHY I WROTE THIS BOOK

I wrote this book for my clients.

To help them during this difficult timeand the even more difficult times ahead.

But I also wrote this for all the other business leaders who will be forced to make difficult choices in the months and quarters ahead.

The recent business, economic, social, and public health challenges have been significant. There has been widespread disruption of the economy and businesses as well as massive job losses. And the economic and business road to recovery may not be a quick and easy one.

Because 70 percent of the economy is driven by consumption, it has become very clear that a historic rise in the level of U.S. joblessness and the unemployment rate will have significantly negative impacts on businesses and the economy.

Many nonessential, nonremote service jobs are at riskand they will be lost. And this could very likely be true beyond the immediate term.

Plus, credit is likely to be constricted in coming quarters, which presents additional business risks as well as risks to housing and the automotive industry.

I have written this book to help companies address the business and economic risks that likely lie ahead.

And the advice herein is also likely to be actionable following any other future potential economic conditions where there is a high level of risk to business profitabilityand a need to cut costs.

To meet this end, I have divided this book into six sections:

• Overview
• Spend Analysis
• Making Cuts
• Asset Recovery and Disposition
• Labor Cost-Cutting
• Forward-Looking Strategies

In the Overview section of Strategic Cost-Cutting , I discuss the importance of strategic cost-cuttingrather than just haphazardly cutting costs.

I also discuss the biggest challenges in a downturn, business priorities in a downturn, and the importance of profitability. This section of the book helps the reader understand and describe the stakes and the battle plan to sustain company profitability.

In the second section of the book, Spend Analysis , I explain how to gather, clean, prioritize, and benchmark company expenses. I also discuss off-limits topics. This section of the book helps the reader understand the process to analyze company data, as well as how to implement the process in their own company.

Making Cuts is the focus of the third section of this book. This section of the book focuses on prioritizing vendors, negotiations, reverse auctions, exiting contracts, and reducing physical overhead. These may be difficult cuts to make, but they are an easier set of cuts than making labor cuts. This section of the book includes actionable strategies to cut costs. The reader will be able to take cost-cutting action after reading this section of the book.

In the fourth section of the book, Asset Recovery and Disposition , I explain the process of asset recovery, asset identification, asset redeployment and repurposing, and asset disposition and divestiture.

The focus of these strategies is to find ways to repurpose, reuse, or otherwise salvage company assets to help the business cut costs, maintain cash flow, and grow. The reader will be able to implement these strategies after reading this section.

Labor Cost-Cutting is the toughest cost-cutting topic. And it is the focus of fifth section of this book. This section includes a discussion of the most important company labor considerations, the first kind of labor cost cutting that comes from reducing overtime and contract labor.

The final part of this chapter includes a discussion of layoffs, which may be the last move almost any business leader wants to take to cut costs. After reading this section, the most important labor considerations, priorities, and process will be cleareven if the process will still be very difficult to implement.