| Arleen Kahn |
| Arleen Kahn is the President and Founder of AMK Associates and a
leading analyst of cost management services centered on controlling and
reducing businesses' basic operating expenses.
As President, Arleen is involved in all facets of cost containment and
vendor negotiations. She has successfully performed assessments for
prospective clients, resulting in hundreds of thousands of dollars in
savings for those companies who have engaged her services.
Arleen has been a contributor to numerous publications, e.g., Strategic
Edge and Management Review, and has twice been featured in Crain's New
York Business. Additionally, she is a frequent lecturer on the subject
of cost management and has a proven track record of successes working
with some of the nation's most well known companies, including
Christie's, New York Sports Clubs, Donghia Furniture, and Zwilling J.A.
Henckels.
Arleen has served on the Board of Directors of the Manhattan Chamber of
Commerce for the past 12 years and received the distinction of being
the first Board member to be honored by the MMC's Executive Committee
for her service to the Chamber. |
| Arleen Kahn
has written 1 articles for SB Informer. |
| View all articles by Arleen Kahn... |
How To Cut Operational ExpensesUseful Tips For The Small Business Arleen Kahn
November 28, 2007
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| 4.1/5.0 (7 votes total) |
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When it comes to cost management, it's the everyday expenses that
are most often overlooked by small businesses. Experienced cost
management consultants like AMK Associates in New York often start with
these overlooked items to give their clients an immediate boost to
their bottom line. Here are some simple tips for cutting your
operational expenses without compromising quality or reducing your
staff:
Office Supplies
* Use generic versus
brand names whenever possible. Many brand name suppliers make generic
versions of their products, so you won't sacrifice quality. For
example, use 3M's Highland Self-Stick Notes instead of their Post-It's
notes and save more than 50 percent per unit.
* Always ask for a price break. Most vendors will not quote you their best price unless you ask. So ask!
Equipment Leasing vs. Purchasing
*
Buy anything small enough to set on your desk; otherwise, lease it.
Leasing gives you the option to upgrade or downgrade, depending on your
needs and changes in technology.
* Keep leases under 36 months.
Buy smaller equipment such as fax machines and printers (Brother and
Epson are great); while their prices constantly drop, the technical
capabilities do not change significantly.
Messenger Services
* Analyze where your packages are being delivered
* Then, negotiate a broader delivery range and pay a fixed price.
Equipment Insurance
*
All leasing equipment companies automatically charge for insurance,
even though your current policy may already cover it. Register your
leased equipment with your insurance broker so it can be added to your
current policy.
* Then request a Certificate of Insurance (COI)
from your broker, and submit it to the equipment leasing company.
Otherwise, you will double your insurance charges.
Shipping
*
Handle shipping costs on a case-by-case basis. Know the shipping
policies of each vendor and choose the best vendor for each item to be
shipped.
* For instance, if the weight is not stated on a
package, some shipping companies will charge customers for a five-pound
parcel. To avoid this, preprint air bills with one pound, and most
vendors will adjust the poundage if the package weighs more or less.
Printing
*
If your letterhead text won't change the same for a six-month period,
print in bulk. It saves both money and time. Don't worry about storage;
most printers will store the inventory and ship at no additional cost.
* If your printer won't store it for free, negotiate storage and shipping into the overall price of the print job.
Telecommunication
*
If your total telecom costs for both voice and data are $3,000 or more,
consider a T-1 connection. While you will be charged a recurring
monthly fee, your per-minute rate will be significantly lower.
*
Check to make sure your phone company is charging you in six-second
increments. If not, you will pay for a full minute for every fax you
send, even though it transmits in seconds.
Service Contracts
*
Don't automatically get costly service contracts for every piece of
equipment. You may find it more cost-efficient to simply pay for time
and materials; even as much as $175 per hour if repairs are necessary.
*
Some service contracts are advisable, but be cautious. For example,
most telecommunication contracts include the PBX (console), as well as
each individual telephone. Though it is advisable to insure the
console, there is little need for insurance coverage on the phones.
The Bottom Line
By
making these minor purchasing changes, you can cut your operational
expenses significantly. Cost management consultants can uncover
additional savings by analyzing other expense items, designing more
efficient systems and aggressively negotiating with vendors. It's
tedious, meticulous, detailed work that many small business owners and
managers would rather avoid (much like filing income taxes). But just
like income tax filings, business owners can offload the work to
experienced cost management consultants to keep their focus on running
their businesses and maximizing their bottom lines.
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