Cutting Costs and Floor Sanding Minneapolis

I was helping a friend out the other day. We were looking at her company’s financial statements and we were trying to figure out why her company was losing money. After running some numbers it became clear that her costs of goods has increased by 5% over the last year, compared to her company’s 13 year average. Also, her operating expenses have increase by 5% and she has cut prices by 5% to preferred customers. As a result, this 15% has eaten into her bottom line. There are a number of other factors that are hurting her profits, but this situation reminds me of what is going on right now with the global financial crisis.  She needs to cut costs because prices have increased. Well, lately they have gone down, but besides the last couple of months everything has gotten more expensive. Why is that? Think of it like this: The U.S. Dollar is the global currency. We use it for trade, Middle Eastern states use it for trading their oil, and a large number of other foreign countries use it for trade also. Everybody believes in it, they trust it because they trust that the United States of America will have a strong economy and stable government. Not only do they use it to trade, they also use it to put their cash in the bank. Countries like Russia, China, and Saudi Arabia have trillions of dollar bills that they put in their bank savings account to have for a raining day. They don’t use their own currency, they use U.S. Dollars. Why? Like I said they trust it. It has value. But here is the catch. The dollar is losing value because there are so many of them floating around the world. The more there are the less each one is worth. Right now, we are printing more of these dollars and selling them to other countries so we can pay for GM, Citibank, AIG, Fannie Mae, FDIC, the list goes on and on. So if the dollar is losing value, it will take more dollars to buy stuff then before. Therefore, prices increase. We need to stop doing this. This is going to hurt the poor and middle class the most. If you live in Minneapolis and are looking for a hardwood floor sanding estimate give me a call. I’ll help you out.