Planning = Survival
• Develop a game plan that brings your cost saving activities in line with your overall business plan.
• When an employee leaves, evaluate whether the position is still needed, or whether it can be filled by a part-time person or outsourced completely.
• Conduct an internal business process review and streamline operations.
• Outsource all non-core functions (accounting, information technology
• support, printing/mailing, etc.).
• Get aligned with the processes of your suppliers and your customers to take duplication and waste out of the system.
Cash is King!
• Develop cash flow budgets and invest unused cash.
• Consider leasing versus buying your office equipment.
• Interest rates are at all time lows. If you have the credit refinance any outstanding loans.
• Adjust investment strategy to allow for more interest income in the short term.
• Renegotiate your credit card discount fee at least annually as credit card volume increases.
• Look to other associations and corporate credit cards for discounts on office supplies, equipment, delivery services, etc.
• Delay capital purchases.
• Require multiple bids on all products/ services above a certain threshold.
• Meet with your banker to review your monthly account analysis statement for potential cost savings.
Payables and Receivables
• Don’t undermine the relationships with suppliers or customers, but realize you are not their bank.
• Change payment cycle to twice per month or every two weeks.
• Stretch payments terms and pay no earlier than 30 days out, unless you can save on payment discounts.
• Calculate the average age of receivables outstanding over the past 6 months. Work it down despite the economic pressures on your customers.
• Change your policy to require prepayment for all product purchases and meeting registrations.
Budgeting and Cost Allocating
• Require all program managers and department heads to justify every line annually.
• Revisit budget assumptions quarterly to determine if upcoming projects are still necessary or if they can be postponed.
• Allocate all costs (direct expenses, personnel and overhead) to each major program area. Pull the plug QUICKLY on non-performing programs.
Un-Fix Fixed Costs
• Renegotiate contracts.
• Don’t be afraid to ask existing vendors for help.
• Cut down on hours/usage.
• If you lease your office space and plan to be there long term, consider renegotiating your lease well before the expiration date to lock in a better rate.
Telecommuting
• Consider telecommuting to offset the need for additional office space.
• Utilize office/cubicle sharing to save space.
• Consider subletting excess space.
Make use of brokers
• Analyze all telecom costs (local, long distance, internet & conference calling).
• Get a better deal on health, disability, life, property and casualty and D&O through a broker
• Ensure that the broker’s commission is paid by the provider and not you.
Use the Web
• Learn and use social networking to drive business
• Find impactful means of delivering your sales message electronically vs. snail mail.
• Use the web for booking airline tickets and ordering supplies where there is an on line discount.
• Move printed materials to your website (e.g. Annual Report, newsletters, member communications, meeting brochures).
• Utilize e-learning or CD-ROM based learning for staff.
• Use audio/web conferencing versus in-person meeting. Archive for later use (sales to members).
Administration
• Ensure that someone in the office is monitoring supplies on a weekly basis.
• Prepare inventory sheets of essential items. Charge programs/departments for supplies used as a direct expense for their area.
• Buy supplies in bulk to get discounts.
• Buy last year’s models.
• Choose quality and replace less frequently.
• Use “store brands” since their quality is usually very good.
• Closely track FedEx, UPS, Airborne and local courier usage.
• Consolidate carriers for volume discounts or use Priority Mail for non-essential items.
Get staff involved!
• Make cost savings everyone’s business! Convince them why they should care!
• At least annually, review the association’s financials with the entire staff.
• Develop a program where staff receives a percentage of the cost savings.
Find “Low-Cost” Experts
• Get expert advice that pays for itself and takes the pressure off you.
• Rely on existing vendors for training and retraining.
Contact us, we can help.
Thanks,
John
John Maver
President
Maver Management Group
(925) 648-7561
Maver Management
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