Why Only Cutting Costs to Increase Your Bottom Line is a Bad Idea

When looking for ways to increase net income or get out of the red, the first thing many businesses and organizations do are look for ways to cut costs.  This is not a bad thing, only many organizations spend most or all their efforts on cutting costs.

In addition to cutting costs, organizations should also spend time looking for ways to increase revenue.  You can only cut so many expenses, but this is not so with increasing revenue.

Increasing revenue is easier said than done.  It involves creativity, game planning, additional hours of work, financial investment, and doing something different.  For some, it can be a scary thing.  But this gives you the opportunity to grow and expand your organization. 

Constantly cutting costs without focusing on increasing revenue will lead to a contraction in your organization.  Many organizations cut administrative staff, which leads to overworked and dissatisfied employees that remain. 

One of the best times to focus on increasing revenue is when you have a healthy bottom line.  Then, you will not be so pressured and stressed to do something about your situation.