Is your bottom line not quite what you’d like it to be? Consider a plan to cut expenses. Begin by running a 5-year analysis on your expenses to determine which accounts have increased the most. Then dive into the details and see which vendors have increased prices at higher rates or percentages over the same 5 years. Are there things you might be paying for that you do not even use or can do without? Renegotiate terms with identified vendors and/or look at alternative vendors who may be offering a better deal.
Other considerations include: Expense/revenue ratios – which expenses are showing increases both in dollar amount and as a ratio of expenses to revenue? What is driving the change? Compare your ratios and expenses to others in your industry – are there changes you can make to be more competitive?
In addition to your 5-year analysis, review your expenses on a rolling 12-month calendar for the most recent 12 months. Are month to month variations expected or what you budgeted for? Where are expenses exceeding your budget, and why? Once you can answer some of these questions, you will be equipped to make some cost-cutting decisions that will enhance your bottom line.
Not sure how to get started or need assistance? The Professionals at Bumpers & Company are always happy to help!