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Make Sure All Expenses Are Effective

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Make Sure All Expenses Are Effective

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Have you seen the
complete range of
   Red Zebra
   services?
Management
    Business Planning
    Budgeting
    Cash Forecasting
    Performance Monitoring
    Profit Improvement
    Book-keeping services
    Debtor Control




                                           T
    Debt Collection
    Creditor Management
    Stock Planning                                    he first step in setting up good trading this year, (see December
    Inventory Management                              Management Memos) as interest rates continue to rise, the US
Marketing                                             slides into recession, and China looks to slow its economy, is to
    Marketing strategies                              trim costs. Make sure all your costs are fully productive. Each cost
    Price Pointing                                    element should be a clear contributor to making a profit.
    Ad planning
    Ad production
    Ad placement                           The most profitable businesses have a good control over their costs - especially their expense items.
    Customer Relationship                  But expense control does not mean pointless slashing, probably removing the very factors that
    Management                             make your business great. Look at each and every expense item individually, to see how it is
    Direct Mail Campaigns                  contributing to the money you make.
    Brochure Design & Print
    In-store Promotions                    In short, keep a level of expenses that's appropriate to what you are trying to achieve. For instance, if you're
    Product Ranging                        locked in a competitive battle for market share, cutting marketing expenses won't help your current goal. If
    Sign Design                            staff seem flat out all the time, may you should increase staff, rather than reduce the head-count.
    Web Design
    Corporate Image                        A constructive approach is to re-examine every expense item, and everyone's job descriptions. It's amazing
    Corporate Videos                       how:
    Sales Improvement programs                  Jobs expand to fill the available time
    Phone Answering                             Work is duplicated because there is a lack of trust somewhere
                                                Someone doesn't understand what is expected of them so the job is not completed
Staff & Recruiting                              The work flow has evolved into a less than efficient pattern
    Recruitment                                 Things get bought that don't need to be, or
    Employee Search                             The work flow has remained stuck in the past, although things have now changed.
    Job Design
                                           Since wages is always the biggest expense item, it is here that the most beneficial improvements can be
    Remuneration Strategies
                                           found. You'll be amazed at how things get done that don't need to be!
    Full Position Descriptions
    Detailed Selection Criteria
    Key Performance Indicators             It's very important, at time like this when things can be so uncertain, that you eliminate any expenses that
    Key Performance Measures               aren't contributing. This can be quite difficult to determine - the usual operating accounts don't even begin to
    Model Documentation                    show the full picture. That's why a full and comprehensive analysis is needed - like the Red Zebra BizMap
    Organisational Design                  (see a sample). However, just for a 'quickie', look at your reported net profit.
    Conflict Resolution
                                           Imagine you have sales of, say, $300,000 a month. Did you pay yourself between $5,500 and $6,000 as a
Training                                   salary (before tax) in the month, and record an operating profit (before interest, tax, depreciation and
    Customer Relations Training            amortisation) of $30,000 or more. If you didn't make that much, it's time for a thorough review - before the
    Sales Training                         uncertainties and interest rate rises get worse. For a different size business, adjust your salary accordingly,
                                           and ratio the profit up or down to fit. You may not take all that salary according to the tax advice you get from
Software                                   your tax professional, but your business should be making enough to pay you that much.
    Sales & Marketing Databases
    Accounting Systems                     Make sure you're controlling all your expenses, and putting your resources where the biggest profit result will
                                           be found!

                                             If you'd like to find out more, talk to us, or ask us a question here! Remember,
 Visit links to associated companies
                                           there's no charge or obligation, and you get a whole hour's consultation free. This
                                           same offer also applies in New Zealand.
                             SOFTWARE - A GOOD EXAMPLE OF CONSIDERING EVERY COST!
New Microsoft Office Suite 2007 has been on the market for a year now. With new generation software about, shouldn't you update? There has been some comment
about the new 'ribbon' user interface, but the price has been the big talking point!

At first the price was so high, major 'price-off' programs were needed to get it moving. Even now, it is still costly. Some are buying it, but most pay for it to be installed on a
new computer. Do you really need to spend that extra money? One client wanted to replace a whole office full of computers - 10 machines in all. Total software bill - an
estimated $10,000. On top of the cost of the computers themselves!

While MS Office 2007 offers a massive range of features, most specialised features are simply not used by any but the most heavy weight user. Need a "Word" processor
and "Excel" worksheets? Perhaps also "Powerpoint" presentations? Does 'free' sound a good price? Today, you can download more than most people will ever need
on their office computer, for no cost at all. With the support and backing of a giant like IBM!




Habit, and the profit needs of your IT provider, will lead you to simply buy the next generation of software from Microsoft, just like last time. Isn't your hard earned money
better in your business, than going to Microsoft? So check EVERY expense. You never know where the next saving's coming from!!!


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