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Friday, July 17, 2009

Finding Strength In A Weak Economy

I sent this letter by WinFax Pro around 19 years ago to hundreds of restaurant owners:

Cost Reduction = Profit Improvement

Cost reduction is dirty business. Few managers want to trim fat by eliminating jobs. Cost reduction is not flashy (like sales increases or new openings).

A 10% reduction in costs can increase profit by 25 to 50%. I can help you concentrate the bulk of cost reduction efforts in the areas that affect profit the most. Completion of a short-term strategy can be accomplished in one month.

Where can the greatest savings be realized? Where should you concentrate your efforts? If you aren't aware of where the bulk of your money is going, you can't possibly know in what areas cost reduction will have the greatest impact.

Current economic conditions offer low interest rates and low inflation. This environment encourages borrowing to invest in cost saving solutions. If you could borrow money cheaply to buy a solution which would lower future costs and improve quality, now is your time.

Streamline your organization through a comprehensive cost reduction program. Build profits through cost reduction, as opposed to unit growth. I can help you eliminate short-term debt and replace it with fixed long-term debt, sell off or close down marginally profitable or red ink operations, free up working capital through inventory management.

1 comment:

Anonymous said...

I agree with the strategy, we have low inflation and low interest rates, but disagree with your premise of borrowing money during this time. The independent restaurants are red-lined from the banking community, anyway in my location. I was informed yesterday, 7/28/09 that a startup food franchise will be funded but not an independent.

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