A number of people have jumped to the conclusion that there must be some connection between Incisive UK's renegotiation of their debt terms, and our recent staff reduction and expense savings initiatives. The truth is that there is no connection. We need to get our expenses down because all signs point to reduced revenues this year--and it remains critical that we maintain our solid profitability so that we can invest in our future needs while satisfying the requirements of those who have invested in us.

Let's put some numbers against that. Last year, Incisive North America's expenses totalled around $147 million. Given expected declines in several of our revenue lines, our expense target in 2009 is about $141 million. That means that in order to stick with the plan as presented to and approved by our Board of Directors, we need to reduce our spending this year by around $6 million compared to what we spent last year.

Now, some of that expense reduction will come about because of the slowdown in our business. That is, if we have fewer ads in our publications, the number of pages we'll print will be reduced and that will save us on some production costs. Or if we cut back on the number of conferences we put on, that will reduce our hotel costs. But those kinds of "variable" cost savings will only account for a small portion of the savings we need to achieve. The rest has to come from the actions we take to cut our expenses--in other words, we need to actively manage our costs and not just wait for them to take care of themselves. And that's what we did in the month of January. At this point we think we have cut enough expense to achieve the $141 million budget target.

Getting our expenses down to the budgeted level is fine, but only represents part of the equation. Revenues are the other half, and if they fall short of budget we need to make up that shortfall as well with further expense savings. That's the question we're grappling with right now--will our revenues meet the budgeted amount, or is there a risk that we will fall below the revenue budget?

There's an old saying worth remembering right now. "Hope for the Best but Plan for the Worst". We're hoping that all of our revenue lines come in the way we said they would in the budget--wouldn't that be nice? But we're drawing up our plans assuming that the direction of the economy remains very uncertain and so it is possible that we will fall short of the plan. That's why we are continuing to look for ways to cut our expenses, so that we can end up below the $141 million level.

I have received a lot of great ideas from around the company for ways in which we might save money. We are looking at all of them. Some are quite small, some are quite large, all are very important. There are now some 880 employees at Incisive North America, and all have a stake in seeing this company survive and thrive. I'll be sharing those ideas with you, both so that you can see upfront the kinds of things we are considering and because I'd like to hear your opinions about them, particularly those which will have an impact on each of us as staff members. If you have an idea to share for something which would save us money, please go ahead and share it with me either below as a Comment or via email if you prefer.