cost

Controlling costs is difficult in a growing business.  Your company culture can impact your success in managing costs find out how.

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Show Notes

Trying to control and manage costs is always difficult in a growing business.  Your company’s culture can affect how your organization approaches spending and cost control.  As a business owner who wants employees to “think like an owner”, he or she needs to set the example when it comes to managing costs in the business.

Key Points

*Cutting costs in bad times are evidence that a company doesn’t regularly manage and monitor costs.

*Companies sometimes treat cost cuts with an “anything and everything” approach. Lisa refers to the ax approach.

*When companies make cost reductions, they need to take time to understand the impact of cuts on the business.

*Regularly monitoring financial information and managing costs can help avoid some those types of approaches to cost control.

*Keeping some perks or nice-to-haves at the expense of essential costs sends a bad message to your staff.

*Having select people in the company responsible or only certain areas impacted by cuts can also have a negative impact.

*Ignoring long term savings opportunities is another way entrepreneurs can get cost control wrong.

*Culture is a company’s approach – what it believes, values, and how it behaves to get work done.

*Culture can influence cost control both positively and negatively.

*Lisa explains how bias can impact how you approach costs and also impact the culture as well.

*Process improvement initiatives with a teamwork approach can benefit both culture and cost control efforts over the long term.

*The entrepreneur can positively impact a cost focused culture by being consistent in the way he manages costs and reinforce cost conscious behavior.

*Creating a cost conscious culture – or any cultural attribute – entrepreneurs need to make sure that it lines up with his or her own beliefs, behaviors and values and lines up with his or her actions.

Resources and Links

Struggling with this in your own business?  Set up a Quick Care Consultation with Lisa Roberts here https://www.bizrx-advisors.com/quick-care-call/

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Prescription for Success

Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

An expense analysis is a tool to help monitor, control and manage expenses in your business. Learn more about it in this episode.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you’re there on iTunes.

Show Notes

You often read in the business news how companies are taking on cost control projects or have cost reduction projects as a strategy in their business.  These companies are focusing on improving operations and financial results.  In order for them to focus on these areas they use tools such as a cost or expense analysis.  In this episode, we talk about using an expense analysis to get insight into your costs and how to use it to take action and make improvements in your business.

Key Points

*Expense analysis is a best practice that companies use to review costs, understand the changes in those costs and the overall impact to the company.

*Benefits of the tool include helping business owners get clarity about costs, understand the impacts of the various types of costs and provide a basis to begin to benchmark results.

*An expense analysis creates a basis to develop cost control or reduction strategies as well as provide a sense of control for the entrepreneur about his company and cost structure.

*Growing companies are realizing increasing sales as a result of growth. However, expenses are growing too and can spiral out of control.

*Companies can find cost savings in direct and indirect ways and we explain what that means.

*Once you identify problem areas, you can then begin to research why things are not in line and how you can take action to correct them.

*Problem areas lead to decisions and actions that create opportunities to improve processes and systems that can take costs out through time savings leading to money savings.

*Your accountant plays a key role in analyzing expenses but cannot be the sole driver of this and Lisa explains why.

*Lisa provides examples from her own experience of ways companies have used expense analyses to save time and money.

Resources and Links

Need advice on how to get started with expense analysis and cost control in your own business?  Set up a Quick Care consultation with Lisa Roberts to help you get started controlling and monitoring costs in your business. Follow this link to learn more.

 

Note: Links in this post may be affiliate links.  Lisa Roberts is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

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Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

We take a deeper dive into pricing in this episode and talk about the questions you need to answer when pricing services in your business.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you are there on iTunes.

Show Notes

In this episode we dive deeper into the concept of pricing your offerings in a service type business.  While there is not one right answer, we’ll talk through the types of things you need to consider and understand when pricing services.

Key Points

*Pricing services is a little bit science and little bit art with also some psychology thrown in the mix.

*There are some essential questions entrepreneurs need to answer in considering their pricing strategy and what they are trying to accomplish.

*Cost, profit, understanding your market, value and perception of value all play a role in pricing services.

*Lisa talks about what she sees as the bottom line in pricing decisions and creating the means to create a model that enables you to achieve what you are trying to achieve in your business.

*Various pricing models are covered including cost plus, value based, competitive, volume, feature based, and the razor blade model.

*The issue of freemiums is discussed and how they fit into your business and pricing models.

*The objectives that you are trying to achieve are covered along with the competing factors that need to be considered with those pricing objectives.

*Other factors are discussed surrounding your target market, quality vs. price and the future trends in your market for pricing.

*Tips are also discussed about managing pricing going forward after you have set your pricing strategy.

*Lisa offers some tips on taking your research further on pricing and shares some informational links below in the resource section.

Resources and Links

To contact Lisa Roberts to get objective advice or talk through your own business and pricing decisions you can get in touch with her here to set up a Quick Care Consulting session.

From the Help Scout Blog Pricing Psychology: 10 Timeless Strategies to Increase Sales

From the Kissmetrics Blog 5 Psychological Studies on Pricing That You Absolutely MUST Read

Here is another episode related to pricing that you may want to listen to- “Costs and Pricing What You Need to Know”

Note: Links in this post may be affiliate links.  Lisa Roberts is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

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Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

Employee benefit plans in the U.S. have undergone a lot of change over the last 10 years.  Entrepreneurs have struggled to keep up with it all.  In this episode we bring  in employee benefits expert Joe Ellis from CBIZ.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you are there on iTunes.

Show Notes

Employee benefit plans in the U.S. have undergone a lot of change over the last 10 years.  Entrepreneurs have struggled to keep up with it all.  In this episode we bring in employee benefits expert Joe Ellis from CBIZ.

Joe will give us the “state of the union” on the area of Employee Benefits.  We’ll get his opinion on where we are now and how we move forward and help entrepreneurs find out how to provide good employee benefits and do it in a smart cost, effective way.

Key Points

*Biggest changes in employee benefits in the U.S. have been due to the Affordable Care Act, the impact of technology and the generational aspects of the modern workforce.

* Subtle changes have occurred surrounding where the dollars are being spent due to the pressure of rising health costs.

*Higher employee out of pocket costs have given rise to offerings by some insurance companies for gap insurance.

*With changes anticipated with health care and the laws surrounding the ACA, we plan on having Joe back to talk about them once things are clearer. Joe advises to continue doing what you’re doing until law is changed.

*Joe is excited about the future since indications are that employers and benefit providers will get back to providing employees with good affordable options that meet the needs of their employees.

*A challenge he sees is the changing workforce as companies now have 4 different generations making up their workforce all with different needs and wants.

*Since money is one of the biggest stressors for employees and affects performance, opportunities for entrepreneurs surround well-being programs like financial wellness.

*One way companies make mistakes in employee benefits is either offering plans that are either too rich or too lean. Joe shares examples of this.

*Goal with benefit offerings is to be competitive in your market or industry. Joe shares some advice on this.

*Online services and apps are becoming more prevalent as companies try to integrate administrative systems which help HR departments spend more time with employees.

*Helping millennials get acclimated into the workforce, pursuing work life balance issues as well as flexibility in schedules and work location are areas where entrepreneurs should focus their efforts over the longer term.

*Another focus for entrepreneurs over the long term is issues surrounding general wellbeing such as financial, mental and spiritual wellbeing.

*Employers should consider whether the dollars spent on benefit plans are spent in the best way possible and should take time to ask employees whether their plan offering is filling their needs.

*A good idea is to get a fresh set of eyes on your plans, whether through an advisor like Joe or other professional, to review your plans.

* These reviews should check for things like cost effectiveness, that your plans makes sense for your business and if they include the current offerings that are available in the marketplace.

Resources and Links

Article Joe Ellis mentioned in this episode – click to access The 5 Traits to Look for in a Health Insurance Advisor

Information about our guest – Joseph Ellis, Sr.

Joseph E. Ellis, Sr. is a Senior Vice President at CBIZ with a long and successful career in employee benefits consulting.  His work focuses on mid-size market, 100 to 2500 employees. He specializes in Employee Health Risk Management Initiatives, Onsite Health Centers and Value Based Plan Designs.  He has been quoted in Reuters News, FoxBusiness.com, Philadelphia Business Journal, Entrepreneur.com and many other publications and has spoken at many industry conferences. Joe provides his clients with the necessary insight to attract and retain employees and control costs.

To follow him on social media here are Joe’s Social Media Links
LinkedIn – https://www.linkedin.com/in/joeellissr/
Twitter – @JellisSr

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Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

Creating a plan and budget involves being ready for good times and bad. When growth you planned stalls it can force tough decisions that impact people.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you are there on iTunes.

Show Notes

In this episode Lisa tells of an experience from her past work life.  It’s about a very difficult situation that her company faced after years of rapid growth.  We’ll talk about what happened, how sometimes in running a business you need to make really tough, life-changing decisions.  She’ll explain how the 5 P’s of a healthy business can help you hopefully avoid or at least be ready when those tough decisions need to be made.  Lisa also shares how this experience helped shape her consulting and coaching business and inspired this podcast.

Key Points

* The company had been growing very quickly and having much success.

* The growth enabled the company to provide employees with a lot of opportunities to enhance their careers and employees were upbeat and optimistic about the future.

* The company had a plan for further sales increases and budgeted for additional hiring and other expenses, but things began to change.

* Over time the sales forecasts started to slip and sales targets were being missed.

*In her role, she monitored the sales results and forecasts and worried whether the sales forecast misses where temporary or a longer term problem.

*Once the problem persisted, she alerted the CEO to potential problems ahead.  After a few more forecast misses, the alarm was sounded and steps taken to analyze the situation the company now faced.

* We determined that this was a longer term problem we made the decision that costs needed to be realigned with our new sales reality.

* Unfortunately, eventually a tough decision had to be made and a large employee layoff needed to be done as well as plans and efforts to bring costs down.

*Lisa talks about the emotional aspects as well as the business aspects of having to make such a decision and carry it out.

*Hear how Lisa and her team developed a plan in order to both execute the task but to do it in a way that focused on the employees affected.

*Listen to what she took away from this experience and how it helped shaped her philosophy about running a healthy business and her passion for working with business owners and entrepreneurs.

*Lisa explains what she learned and how the 5 P’s – Planning, People, Practices, Process and Profit all played a role in this story.

Resources and Links

Note: Links in this post may be affiliate links.  Lisa Roberts is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

*Free Mini-Ebook – 5 Business Growing Pains and How to Overcome Them

To get your free copy of the ebook sign up using this link

*Quick Care Session –  follow this link to schedule a call with Lisa here

Sign Up to Get Updates

Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

Sales growth can end up being a trap that entrepreneurs can fall into.  High growth and large increases in sales can put a ton of stress on a company that isn’t ready for it.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you are there on iTunes.

Show Notes

Growing sales can end up being a trap that entrepreneurs can fall into.  High growth and large increases in sales can put a ton of stress on a company that isn’t ready for it.  In this episode we cover the symptoms of the sales growth trap and what an entrepreneur can do to avoid falling into this trap.

Key Points

*If your company isn’t ready for growing sales, problems can quickly surface.

*Growing sales numbers can end up as a trap for a company that isn’t properly staffed and equipped can end up too stressed in periods of high growth.

*Readiness to handle increased sales volume is important to avoid things like product or service reworks, redo, shortages, missed deliveries, subpar quality and other errors.

*Internal problems that end up at the customer site can lead to issues that affect customer loyalty and also adversely affect your brand promise, eventually leading to problems with future sales growth.

*Increases in customer complaints, repairs as well as declines in existing customer sales are indications that something is wrong in your business.

*Employees may also show signs of stress of the sales trap when they seem overworked, sick call outs increase or overtime numbers increase and become the norm rather than the exception.

*Costs related to problems with managing sales growth can set a company back and have a negative impact with both costs increases and also the potential for future missed sales opportunities.

*Sales forecasting, attention to the back office role in the sales process as well as monitoring resource planning, quality as well as customer, production and productivity statistics all help to avoid problems that result from the sales trap.

*Sales as a business process includes not only the prospect opportunity qualification but also qualification of the sale itself which includes the ability to pay.

Resources and Links

Check out this blog post – 20 Signs Sales Growth is Overwhelming Your Business and make sure your watching for these in your business!

Note: Links in this post may be affiliate links.  Lisa Roberts is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

Sign Up to Get Updates

Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

Properly pricing your products and services involves knowing your market and competition.  But, in order to be profitable you also need to know your costs.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you are there on iTunes.

Show Notes

Pricing decisions involve much more than charging what the competition is charging.  In order to properly price your products and services to achieve a reasonable profit ,  you need to know your costs.  In this episode we will talk about understanding your costs, breakeven and pricing and how costs play an integral role in your pricing and managing your business and your profitability.

Key Points

*Costs in your business are either direct or indirect and we describe them and which costs are considered direct or indirect.

*Costs can also be viewed as either fixed or variable and describe the difference between each.

*Overhead costs further help define how various costs are viewed in a company and applied to areas of the business.

*We discuss important reasons why entrepreneurs need to understand these costs and why it’s important for pricing decisions in your business.

*The concept of breakeven is described to show how it can be used to understand your costs structure and pricing.  The formula for break even point for units is Fixed Costs divided by (Sales per unit – Variable Cost per Unit).
The example in the show is as follows Sale Price $100, Variable cost per unit $50 Fixed costs $100,000.  The math is $100,000 divided by $50 ($100-$50) for a total breakeven 2,000 units.

*Lisa describes how breakeven helps entrepreneurs analyze cost structure as well as pricing decisions using various examples.

*Many factors go into price and pricing models that businesses use. No matter which model is used, companies need to consider their cost structure as a part of pricing and cost decisions.

*Lisa explains with a simple example to illustrate how service businesses must also understand their cost structure to manage their pricing and understand breakeven.

*To get help understanding this in your own business can involve research, advice from your accountant, bookkeeper or other advisor and also taking steps to get a firm understanding of the costs in your own business.

Resources and Links

If you would like to contact Lisa Roberts to set up a Quick Care consulting session follow this link

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Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

As an entrepreneur, focusing on your sales numbers is a good thing. However, focusing only on sales and not paying attention to the other key numbers in your business can hurt you in the long run.

You can listen to this episode by hitting the play button above.

To download the episode, right click on this link and choose Save Target As. Go to the folder where you want to save the recording and click Save or Enter.

You can make it easier to get the episodes, by subscribing to the show on iTunes here. Subscribing to the show gives you all the episodes and downloads them automatically to your preferred device so that you can listen to them when and where you want. And hey, if you like what you hear, please leave a great rating and review while you are there.

Show Notes

Business owners like to focus on sales and revenue growth as a measure of how good their business is doing. It feels good to tell someone that you reached X dollars of sales or that your sales are up 25% over last year. However, too much focus on sales can hurt you if you are not paying attention to other numbers in your business. Focusing only on sales and revenue growth can lead to problems for your business in the long-run.

Key Points

*It’s important to grow sales but it is also to pay attention to things like sales mix and cost structure.

*Pay attention to sales mix so that your sales are not overly concentrated in one particular area or segment.

*Sales quality is explored and we define the types of things that help make a quality sale

*Unprofitable sales can hurt your business.

*Entrepreneurs need to understand their cost structure and define pricing and discount policies to avoid unprofitable sales

*A business’ cost structure includes both direct and indirect costs and each need to be considered when pricing products and services in order to achieve the profit margins that you are driving toward.

*We look at how to measure yourself against your own performance and your industry segment and benchmark things like margins and profitability.

Terms Used in The Episode

Sales Mix
Quality Sale
Unprofitable Sales
Gross Margins
Cost Structure

Resources and Links

Below are some links where you might find business comparisons (note: some of these resources are free others are paid):
BizStats – free business statistics and financial information
Industry information from Yahoo! Finance
Bplans – industry reports
Market Research.com Industry reports
IBISWorld Industry Research Reports
Hoovers Industry Directory
Report Linker Industry Insights

 

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Lisa Roberts is a business operations specialist who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here .