So much about Cost Cutting

These are some key points I gathered from reading E-Myth blog.

Why cost cutting? From strategic point of view:
1. Demand in the market has dropped off, causing an unacceptable decline in profitability
2. The business is losing money and needs to return to profitability
3. The business is profitable, but management has profit objectives that require a better return at current revenue levels

What are the risks involved:
- Will you reduce your ability to compete effectively?
- Will you reduce the quality of your product?
- Will you reduce your clients' experience with your company?
- Will you reduce the goodwill you have worked so hard to build?

2 important ideas of a well thought through strategy:
1. A strategy requires you to take a step back, put things in perspective, and look at the big picture.
2. A strategy demands that you express clearly the result you intend to achieve. Cost cutting is a means and not the results, increasing profit is.