This week will likely see another round of rash cost slashing as people and businesses react to the Budget. But the question you need to ask, or consider, is one that hangs over every cost-cutting phase and that is are you cutting enough or even too much? You need to aim for the right level of expenses or overheads. Those expenses should be for only three purposes. If you question your expnses or map them against these 3 purposes then you should be on the "right overhead" track.

In our SpotLearn Business Performance Academy we've been looking carefully at how nthese three purposes can give you a gauge or guide in cost cutting

The three purposes are:
1. Expenses that you have to incur as a result of your companies activities. These include payroll, accounting and so on. Question if those expenses are inflated by comparing them     against your leanest competitor
2. Expenses that increase your effectiveness and efficiency. Draw the line where the improvement in effectiveness doesn't pay for itself
3. Expenses that lay the basis for profitable growth. Question the level of anticipated growth.

So don't just knee-jerk react to cost slashing. Use the "three purposes" as your gauge.