revenue management

While there are definitely places to cut costs in your business (and we will be looking at several candidates), a key mistake made in lean times is relying almost exclusively on cost cutting within existing processes, often damaging both short and long-term profits, alientating employees and risking increasing overall costs to eventually "reverse" these poor decisions.

So we begin our series by looking at some of the over-arching principles that should guide your approach at maintaining and improving profits during times of low returns. We will look at these things in general terms first and then get very specific about how to increase your chance at profit improvement.

Everyone is pretty much convinced that 2008 will be a year filled with red ink for those who only produce and market pigs. The bulk of the problem of course is the unfolding and misguided government policy which is supporting the doubling and maybe tripling of average corn prices with little or no impact on the goal the policy is supposed to address, namely: more freedom from foreign oil.

The cost of this miniscule increase in "freedom" will go far beyond the increased prices users of corn are paying world-wide as a result. I am going to take another stab at those costs soon since more and more is becoming known about the unintended and collateral consequences of all of this. But since we find ourselves here, with legislators of every political stripe in agreement that it is a very wonderful thing, we have to think again about how to reorganize the operation to keep from getting sunk financially.