When profits slip away: how you can cut business costs
When you bring in a dollar of revenue, you can keep only part of it. But when you cut a dollar of wasted expense, you keep the whole thing.
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Tips on stopping profits from slipping away.
No business executive or owner sets out to waste money. And when a business is small, they usually manage to stay on top of expenses. They look at every invoice. They remember what things cost last month or last year. They keep a sharp eye out for waste.
But as companies grow, it gets hard to keep a finger on every cost. You have to hire other people to manage part of the business for you. They may have no idea what you used to pay for something. They may get caught up in their day-to-day duties and not have time to review invoices or pay attention to changes in the market for certain goods and services. An invoice comes in, they make sure it gets paid, and they move on.
And that can kill your profits.
You see, when you bring in a dollar of revenue, you can keep only part of it. But when you cut a dollar of wasted expense, you keep the whole thing. Spending one dollar less will add as much profit as creating $10 or more in top-line revenue.
Maybe one of your departments needed to rush out for some new supplies to finish a project on a deadline. There wasn’t time to hunt around for bargains. When it came time to
re-stock, someone went back to the same vendor and paid the same price. After all, it was OK the first time. And so some profit walks out the door.
Then there’s your telephone and data services. Here's a typical progression:
- You start of with one location.
- Then you add a few lines and a new data connection.
- Then you add another location and few more lines.
- Then another location and another.
Before you know it, all of those locations have multiple statements, multiple billing structures and your accounts payable department is swimming in statements. It is hard enough to manage all of the statement and pay them on time, let alone sifting through all of the jargon and data to see if they are correct.
Finding inefficiencies is key
This wasn't on purpose, but it happens. All the time. You see, we do not reduce quality or service to find savings. We focus on finding inefficiencies in billing structures and invoicing errors.
Often, there are even ways to lower costs and actually increase service levels by pairing up the right vendor to a specific situation.
The way to uncover those hidden costs is through a complete review of expenses, concentrating on common areas of waste. We do this in areas like shipping, telecommunications, and office supplies.
But who has time to do that? We do.
That’s the whole concept behind hiring a cost-reduction firm. We have the time because that’s all we do. You can plug into our:
- Expertise -- we do alot of this!
- Knowledge of the vendor markets -- we know the discounts that are available
- Ability to negotiate better prices -- all without sacrificing quality
Alignment of interests
Because we earn our fee from the money we save you in the first couple of years, the service doesn’t cost your company a penny.
Have you ever suddenly realized that you had been paying more for something than you needed to? I’d be interested in hearing about it. Leave a comment or send us a note.
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