Operational Cost Management Requires A Systematic Approach

Many factors go into the successful running of a business. In most cases, business owners apply a systematic approach to generating sales and enhancing productivity. In the area of operational cost management, however, often it is a matter of “hit and miss” or, at the very least, a passive, shared responsibility among all personnel. But merely admonishing staff to save on paper, be energy-efficient and limit courier deliveries is not enough to truly generate legitimate cost savings.

Cost-cutting practices need to be clear and consistent. Executives need to find the time to actively review expenses, pinpoint areas for cost reductions and mold staff behavior into a pro-active stance that reflects leadership and intuitive thinking. Should the time or the resolve be lacking for these measures, it might be wise to consider a cost management consultant to expertly manage the situation.

First, you must ask yourself what a consultant might actually do for your company, then you must determine whether the operational cost savings will justify the consultant’s fees. Next, how will that fee be paid? Will it be a fee for service or a contingency arrangement? Equally important is checking the consultant’s track record of success in dealing with a company of your size and verifying their independence from any of your suppliers. Once you have selected a knowledgeable consultant, be sure to review together your company’s goals and needs so there is a full understanding. A quality cost management consultant should be able to provide the systematic approach that is so important in managing your operational costs. Under proper conditions, this can become one of your most predictable and manageable profit centers.

Contact ERA Today! For more information, contact Marylou Garcia, ERA Area Developer for Los Angeles and Orange County: 310-791-5570 or mgarcia@erala.net and visit our website at http://www.erala.net/.

Cost-Cutting…the Hidden Gem of Profitability

Every smart business searches for creative ways to become more profitable. One of the most overlooked profit opportunities, however, lies hidden within a company’s operating costs. Even businesses that stress prudent management of their costs typically overpay by as much as 75% for materials, equipment and services. Clearly, cost reduction management has a valuable role in every company’s bottom line. It begins with diligently questioning the demand for the product or service to be purchased. Is it a strategic or an operational cost? Can you eliminate the need altogether? Is it worth paying more for additional quality? Equally important is the manner in which you build key supply relationships. Never base that relationship on blind trust or, conversely, take a strictly adversarial stance. Try to identify excessive margins in the supplier’s pricing and don’t be afraid to negotiate so you get only what you need. At the same time, suppliers should be treated as partners in an atmosphere of mutual cooperation.

Above all, there must be clear lines of accountability for managing operational costs within your organization. Whomever you hold accountable should have the authority and capacity to act for the entire company, and their key performance indicators should be spelled out in their contracts. You must be completely confident that the person or people entering into contracts with suppliers have adequate market knowledge and negotiating experience. If there are particular costs that you cannot attribute to a particular person’s responsibility, you have probably identified potential areas of cost-cutting and, consequently, profit opportunities.

Remember…never assume that you are properly managing your operational costs. Complacency such as that keeps you from achieving satisfactory results. At ERA, for every $1 million of costs under management we put an average of $200,000 back to our clients’ bottom line. Isn’t that kind of money worth more than a mere assumption?

Contact ERA Today! For more information, contact Marylou Garcia, ERA Area Developer for Los Angeles and Orange County: 310-791-5570 or mgarcia@erala.net and visit our website at http://www.erala.net/.

Free ERA Teleseminar Will Emphasize Franchise Opportunities for Financial Independence

Expense Reduction Analysts (ERA), the largest Cost Management Consultancy franchise company in the world, is holding a FREE teleseminar for business professionals interested in achieving financial independence through a unique franchising opportunity. This highly anticipated one-hour online event, covering specific ways to maximize your earning potential, will take place Wednesday, August 29th, at 6 p.m. PDT.

Marylou Garcia, the ERA Area Developer for Los Angeles and Orange County, and Ken Hagerstrom (CEO of ERA-USA), will conduct the seminar, which will highlight the various benefits of the most exciting white-collar franchise opportunity available today. The informative, quick-paced seminar will show attendees how to tap into greater earning potential, gain more control and balance in work and personal life, achieve self-employed independence, receive recognition for achievements and take advantage of the support and structure of a successful business network.

“This will be a real eye-opening event for accomplished professionals who want to take control of their earnings and learn how to arm themselves with the tools of success,” said Garcia. “It’s a perfect opportunity for people who are tired of making money for others with their special, valuable skills. We want to demonstrate how you can put those skills to use to generate solid income for years to come by owning a franchise that offers a service all companies need. Best of all, it’s a successful, proven formula that we use.”

To sign up on the attendance list for one of these professionally stimulating ERA seminars, visit www.erala.net/T1/seminart1.html. Registration is limited, so interested professionals are encouraged to sign up quickly. For more information about the exciting opportunities available through Expense Reduction Analysts (ERA), visit www.erala.net or call Marylou Garcia at (310) 791-5570 or e-mail her at mgarcia@era-usa.com. ERA franchises include over 600 consultants in 23 different countries around the world. These consultants have been highly successful helping companies to reduce waste and improve profitability.