Robert Stearn's Blog

Reduce costs with the launch of the third free guide!

robertstearn — Thu, 01 Oct 2009 19:29:13 +0000

The Telegraph Business Club has teamed up with the UK’s largest cost management consultancy to produce three guides, designed to provide members with business-critical advice on creating effective cost reduction programmes, which retain and improve profit margins.

The third guide in this series has now been launched and it focuses on back office supplies costs. This follows on from the first guide which focused on managing property and premises costs, and the second which focused on finance and banking costs.

The Guides are part of the wider Telegraph Business Club/Expense Reduction Analysts’ campaign: Is your business COSTING you? Whilst the majority of businesses may know their expenditure in non-core operating areas, it may be costing their business due to the fact that they are not achieving best value from suppliers. The campaign, which will also include six cost reduction forums across the UK to share best practice in cost management, has been launched to put this right.

Links to the guides will be sent to all members and will be available at http://expense-reductionanalysts.com/TBC/Guides.htm and http://www.telegraphbusinessclub.co.uk/

Details of the cost reduction forums will also be available in due course and bookings can be made online at www.erauk.net . If you are looking to reduce costs and are interested in an exploratory meeting please call me on: 01303 244755

Equifax sees supplier alerts leap up 300%

robertstearn — Sat, 19 Sep 2009 08:14:11 +0000

Buyers are taking the threat of suppliers going bust very seriously, figures from Equifax show.

The business information provider registered a 300 per cent increase in customers using its business monitoring alerts in the past year.

It said the “phenomenal rise” demonstrates companies are keeping a close watch on the financial position of both suppliers and clients, in a bid to safeguard themselves from risk.

In July, Equifax found a total of 8,874 firms ceased operations during the second quarter of this year (Web news, 20 July).

This represents almost a 40 per cent rise compared with the same period in 2008.

The company’s external affairs director, Neil Munroe said: “In times when new credit is difficult to come by and banks are reducing or even recalling debts, there may be a temptation to cut spending on basic processes and disciplines. But when times are tough, cutting back on checks could be a false economy.”

Whilst most organizations recognize the cost reduction benefits of engaging in a long term partnership with Expense Reduction Analysts, many overlook the ongoing cost management aspects. One of the many cost control elements provided via quarterly supply audits throughout the period of engagement, is supplier credit checks.

These checks, coupled with Expense Reduction Analysts’ in depth knowledge of the supply market, help to minimize the risks inherent in suppliers going bust.

For more information please contact me on: 01303 244755.

Give your business a ‘cost healthcheck’

robertstearn — Thu, 16 Jul 2009 22:36:57 +0000

A recent study by the Chartered Institute of Personnel & Development concluded that making job cuts should be the last resort in the current economic downturn, after revealing that the cost of laying off an employee could be more than £16,000.

Against this another study revealed that 69% of Financial Directors feel under pressure from board colleagues to find more ways to cut costs. With Britain now officially in recession, how does a business keep costs in check to maintain a healthy bottom line without necessarily making redundancies?

To find out how to make sustainable cost reductions and reduce the pressure to make redundancies, contact Expense Reduction Analysts to arrange a free exploratory meeting.

Phone 01303 244755 to book an appointment.

Gloombuster tip of the week

robertstearn — Tue, 16 Jun 2009 20:51:26 +0000

“Develop a culture where everybody within the organisation is responsible for challenging costs, from the receptionist to senior management. Celebrate cost reductions as you do business.” – Robert Allison, Managing Director, Expense Reduction Analysts.

Is your Business Costing You?

robertstearn — Tue, 09 Jun 2009 22:59:12 +0000

The Telegraph Business Club is teaming up with Expense Reduction Analysts, the UK’s largest cost reduction consultants to run a series of forums throughout the UK, which will provide invaluable insights into effectively managing costs, particularly critical in the current economic downturn.

The next breakfast forum is being held in partnership with the Institute of Directors (North West), at the IoD Hub Manchester, Peter House, St Peter’s Square, Oxford Street, Manchester, M1 5AN on the 1st July at 8.00am.

Speakers include: Dave Summer-Smith, Programme Director, Telegraph Business Club, a speaker from The FD Centre and Robert Allison, Managing Director, Expense Reduction Analysts.

Robert Allison will put the focus on making savings on non-core business expenditure, which is rarely reviewed and benchmarked on a regular basis by the majority of companies. Typically for every £10,000 of cost savings made, a company would need to generate £125,000 in sales to have the same impact on the bottom line. Allison will provide advice on ten quick wins to reduce non-core business expenditure based on the experience of Expense Reduction Analysts, which helps household name brands and SMEs manage their cost base and retain profit at a time when they need it the most.
Expense Reduction Analysts was founded in the UK in 1992 and today is the world’s largest cost reduction consultancy. The company’s circa 150 consultants in the UK provide in-depth knowledge across more than 100 supply areas. On average it saves clients 20%.

TO BOOK YOUR PLACE CLICK HERE.

Reduce costs with the launch of the second free guide!

robertstearn — Wed, 06 May 2009 15:55:42 +0000

The second guide in this series has now been launched and it focuses on banking and finance costs. This follows on from the first guide which focused on managing property and premises costs. The third and final free guide in this series will focus on back office supplies and will be available in September.

Links to the guides will be sent to all members and will be available at http://expense-reductionanalysts.com/TBC/Guides.htm and http://www.telegraphbusinessclub.co.uk/

The Telegraph Business Club launches breakfast forums into managing costs

robertstearn — Wed, 29 Apr 2009 11:47:08 +0000

Programme Editor, Philip Smith MBA, has included the following message in this week’s newsletter to all Telegraph Business Club members:

“Talking of controlling costs, Business Club is teaming up with Expense Reduction Analysts, the UK’s largest cost reduction consultants, to run a series of breakfast forums into managing costs. The first will be at the Daily Telegraph’s London office on Wednesday May 20 from 7.45am to 9am. Click here for details

Event partners include the FD Centre, the largest provider of part time finance director services in the UK and the London Chamber of Commerce & Industry, which represents some 3,000 businesses across the capital.

The next forum will be on Wednesday 1 July at Peter House, St Peter’s Square, Oxford Street, Manchester.”

Click here to see the original article

Ten Top Cost Cutting Tips as published in Management Today (Part Two)

robertstearn — Wed, 15 Apr 2009 14:12:57 +0000

Five more ways to boost your bottom line, with some expert cost-cutting tips from a leading specialist.

In the second of our two-part series, MT brings you five more cost-cutting tips from Expense Reduction Analysts. The world’s largest specialist cost improvement consultancy, ERA claims that most organisations can save up to 20% of their operating costs by trimming non-core expenditure…

Click here for the first five ways to cut your costs by 20%: http://www.managementtoday.co.uk/channel/Finance/news/897878/ten-ways-cut-costs-20-part-one/

6. Don’t purchase things you don’t need
Buy what you need, not what your suppliers would like to sell you. Suppliers will often use bait-and-switch tactics to move you onto their higher-margin items, or will try their version of the fast food pitch: ‘Would you like fries with that?’ Many suppliers make much more money from supplementary services or add-ons like service or maintenance agreements. Be sure you understand what you are buying and whether you really need it; for example, do not purchase premium services unless they are necessary (such as a 10am courier delivery if 5pm is acceptable).

7. Let suppliers know about your cost review

Rarely will a supplier volunteer a price review. Let your suppliers know that you are undertaking a review of all overhead costs. Also refuse to accept price increases during these challenging times, or any suggestion from your suppliers that ‘our prices are higher because we provide superior quality and service’ or ‘our prices cannot be beaten’. Remember, it is a buyers market and you will be amazed how many suppliers will back down to retain the business.

As highlighted above do your research and comparison-shopping before approaching suppliers, so that you are able to negotiate from a position of strength. During negotiations present the value of your business to the supplier.

8. Establish key supplier performance

In addition to reviewing prices, look at establishing key supplier performance indicators that are appropriate for your business. Set them higher than required, and this will add to your cost base. Conversely, set them too low, and this could affect the quality of your service to your clients – and thus your business relationships in the longer term.

Make sure you obtain management information from suppliers relating to any cost increases/decreases, otherwise these could be easily be hidden (and therefore missed) in an invoice incorporating a large number of supplied items. This helps avoid over-charging and also ensures a transparent relationship with the supplier. Finally, constantly monitor their performance levels and adherence to your contract.

9. Only jettison suppliers as a last resort

Reducing costs is not just about going to a cheaper supplier. Good relationships in any line of business are fundamental, and the one with your supplier is no exception. By following the tips above and working in partnership with your suppliers to identify cost-cutting strategies, you can in the majority of cases generate savings without affecting or disrupting standards of service through changing suppliers.

10. Create a long-term cost-management programme

Potential savings are great, but they don’t mean anything unless they are realised. After implementing a culture of cost-consciousness, appoint cost champions to drive the programme forward. Constantly monitor the situation to ensure that staff are not slipping into old habits; that suppliers are charging correct prices; and that service standards match the agreed specification. Also remember to frequently review each business cost category, whether it be logistics, property, banking, telecommunications, property costs or anything else.

Ten Top Cost Cutting Tips as published in Management Today (Part One)

robertstearn — Wed, 15 Apr 2009 14:03:45 +0000

With companies under pressure to boost their bottom line, an expert offers ten top cost-cutting tips.

Now we’re officially in recession, how does a business keep costs in check to maintain a healthy bottom line? A recent study by the Chartered Institute of Personnel & Development concluded that job cuts should be the last resort, since the cost of laying off an employee can be more than £16,000. Expense Reduction Analysts, the world’s largest specialist cost improvement consultancy, claims that most organisations can save up to 20% of their operating costs by trimming non-core expenditure – so MT asked them to supply our readers with their top ten tips. See what you think.

1. Create a cost-conscious workplace culture

The economic boom over the last ten years may have affected your employees’ focus on cost control. Develop a culture where everybody within the organisation is responsible for challenging costs, from the receptionist booking a courier to senior management reviewing their nationwide logistics provision.

Celebrate cost reductions as you do business wins. Even create an internal awards scheme for cost reductions made by employees.

Make staff aware that savings go straight on the bottom line. Also, use powerful and simple monetary examples to educate your workforce regarding the quick and significant impact that cost savings can have on profitability. For example, based on a typical 8% profit margin, for £50,000 of savings a company would have to increase sales by £625,000 to have the same positive impact on the bottom line.

It is critical to start caring about cost management before the situation becomes critical and hasty decisions have to be made.

2. Lead by example

Business leaders need to set an example by demonstrating to employees that they care about saving money, even on the smallest items. Don’t book the most expensive flights and hotels when you are asking your own management teams to take the budget option in both cases. As a business leader you will need to open your organisation to scrutiny and examine every cost.

3. Keep the green light flashing

Instil a sense of urgency, so employees act immediately to reduce costs and maximise profitability. If it does not remain high on the boardroom agenda, employees will see the directors’ crusades as ‘the flavour of the month’ and the drive to cut costs will fall to the bottom of everyone’s in-tray.

4. Establish what your costs really are

You may believe your costs are under control, but your perceived ‘well-kept ship’ may not be as leak-proof as you thought. Forensically examine and benchmark your costs line-by-line. In our experience, this is often the major barrier to making cost improvements, since it demands significant resource. So it could reap significant dividends to look at using outside agencies, consultants and benchmarking services to establish your costs by getting comparisons against competitors and other suppliers.

In doing so you will highlight the areas that have the most potential for improvement, helping you set cost-saving priorities.

5. Be market-wise

It is critical that you are aware of the constantly-changing supplier market for your costs, so you can identify developments that you may be able to capitalise on (for example, the fact that energy prices are currently going down and paper costs are on the up). Establish a supplier market intelligence system and update that system at regular intervals.

To have any chance of negotiating favourable arrangements with suppliers, you must have knowledge of the prevailing market prices and practices. Do not rely on your supplier for this information.

Also don’t waste time and energy on looking at individual item costs from different suppliers. By enhancing your knowledge of the supplier marketplace, you will have more confidence to use one supplier for a number of items, and thus benefit from a ‘basket’ cost rate.

Part Two, with five more cost-cutting tips, will follow tomorrow…

Reduce your costs with launch of NEW Guides

robertstearn — Tue, 31 Mar 2009 19:02:14 +0000

The first guide focuses on managing property and premises costs. Occupying, running and maintaining property is one of the largest areas of expenditure for any business and the guide covers:

- Energy and utilities – are you maximising your chances of getting the best deal on energy prices?
- Legal and finance – do you understand the terms under which you occupy your property and are you up to speed with the latest tax developments?
- Building, plant and facilities – are you getting value for money from your building services suppliers?

Subsequent guides will cover banking and finance (April) and back office supplies (September).

Links to the guides will be sent to all members and will be available at http://expense-reductionanalysts.com/TBC/Guides.htm and http://www.telegraphbusinessclub.co.uk/