Gary DiGiuseppe and Ron Timmerman
Dolan Media Newswires
Long Island, NY – Listen carefully. Can you hear it? That’s the sound of your business losing profits – one drip at a time.
Unless you are always questioning, “Are we doing everything we can to keep our costs down?” your business could benefit from adopting a no-drip culture.
A no-drip culture is simply attending to every leaky tap in your business – the evergreen equipment lease that automatically renews, the contract that hasn’t gone out to bid in several years, the old fee structure that no longer provides the best price for your current business volume. The more you look around, the more leaks you are likely to find.
If your business is like most, you are always trying to replace lost profits by increasing sales. But reducing expenses, or stopping the leaks one drip at a time, is another way to contribute to the bottom line.
Here are a few guidelines for bringing a no-drip culture into your organization:
Do not overlook any costs when looking for profit leaks. No business expense is sacred.
Constantly ask, “Is this expense really necessary?” If your answer is “we’ve always done it this way,” that’s a sure sign that the cost can be reduced or eliminated.
Write down the savings you expect for a cost – then double it. Most of the time we limit our efforts to our expectations. Why be satisfied with saving 10 percent when you may have easily achieved a 20 percent savings?
Ensure the changes you identify are implemented. Many good money-saving ideas are lost simply through a lack of action and the drip continues.
Make sure all those that are involved buy into the no-drip culture. Too often management puts new processes or procedures in place, but they gradually are not followed completely. This undermines the new steps taken and creates a myriad of problems and inefficiencies that may fly under the radar.
Make sure you can measure the savings. That’s the only way you can be sure you have achieved cost reductions. Reward yourself by recording the results of your efforts.
As your record grows, you will be well on your way to a no-drip culture that values adding profits to the bottom line.
Gary DiGiuseppe and Ron Timmerman are managing directors in Holtsville with Expense Reduction Analysts, a worldwide network of consultants.