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The Cost of "Doing Nothing"

By Scott Grotjan | February 1, 2016


"There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction." – John F. Kennedy


Today's economic environment of shrinking margins and soaring costs has everyone focused on controlling costs. However, there is a cost that is often overlooked. That is the cost of doing nothing. We often get so caught up in the aspects of running our business that we fail to realize the incremental cost of not implementing a cost reduction solution.


Consider this. If your company spends $25,000 per month on supplies and a new cost reduction strategy yields a 20% cost savings, the cost of doing nothing becomes a new cost of $5,000 per month. This would not include any savings from potential efficiencies or process improvements.


Furthermore, if your company has a 10% net profit margin, then to yield this same bottom-line benefit you would need to create additional, consistent sales of $50,000 per month. 


The choice is yours. Doing nothing can be a very expensive decision.

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