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Smart Moves in a Bad Economy

When costs rise and customers wane, don't let knee-jerk reactions kick you in the wrong direction.

This story appears in the December 2008 issue of Entrepreneur. Subscribe »

In a perfect world, owners would have plenty of time and energy to regularly review their balance sheets and analyze expenses, cutting unnecessary spending as they spot it. In reality, we often zero in on expenses only in a scramble to get back to sustainable profitability when the stagnates and growth stalls. But panic can lead to costly mistakes, and experts caution that while paring down may be necessary in the current climate, entrepreneurs should be careful not to cut so deep that they poorly position their companies for an eventual rebound. Here are three to reconsider and three cuts to avoid.

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