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View Full Version : looking to cut expenses


tiedeman
08-23-2003, 12:07 AM
I am trying to cut down our monthly expenses by $200 a month. I know that it may not seem like much, but it is a lot harder than it seems. Now when I say expenses I mean like phone, office supplies, print cartridges, amount of paper use, etc. We have actually switched over to PDA's to save money on ink and paper useage.

Any other ideas on how to cut expenses, not including equipment?

mrbenfer
08-23-2003, 12:39 AM
No personal Calls with business phones

e-mail invoices--- (sounds like a great idea to me)

paponte
08-23-2003, 12:47 AM
If by saying phones that includes cell phones, check all your plans and make sure you are utilizing your minutes. Someone that constantly goes over, or someone that never touches their plan minutes adds up quick. :cool:

Team Gopher
08-23-2003, 08:14 AM
Hi Tiedeman,

Do you have an idea what % of your customers you could email invoices too?

GLAN
08-23-2003, 02:06 PM
Consider your traveling in truck and car

Any unecessary trips?
Could you group appointments?

DUSTYCEDAR
08-23-2003, 02:15 PM
check cell phone bill for unneeded services same 4 office phone
also light bill do u have employees maby a few less hours her and there
why do need to cut $200 things that bad?

tiedeman
08-23-2003, 10:34 PM
the reason for cut is because it's a goal that I have. I was thining about $150, but I figured $200 instead. Basically just a goal I wanted to try to see whether or not I could do it. So far, I am like probably saving around $120+ a month.

I already email invoices to some customers, like only 3 of them.

The cell phones: I have actually thought about just totally dropping the cellular minutes on my Nextel and only have 2-Way.

What I have done so far for per monthly:
take off caller id Save $10.00
buying print cartridges at a different place Save $6.00
buying teeshirts, not polo work shirts Save $80.00

And then little stuff like using PDA's instead of paper, cutting down on mile radius, loading & unloading equipment myself, not my employees, maintenance myself as well, fueling up equipment myself the night before. There are a bunch of other little stuff as well.

DUSTYCEDAR
08-23-2003, 10:47 PM
good 4 u i hope u can find a few more cuts i stoped eating out and take my lunch that saves me 5-10 a day

GraZZmaZter
08-23-2003, 11:37 PM
Try to do all your daily "running around" in one trip.

Write down what you have to do and where you have to do. Try to make a loop starting/ finishing at your house/office. Kind of like your mowing routes.

Every little bit counts.

Rustic Goat
08-25-2003, 12:54 AM
What kind of employee expenses do you have, items that you furnish/pay for that might need to be cut down/eliminated?

Have you gone back over the books to see what kinds of things your buying that while nice to have are not necessities?

Of course you could always cut down on the bosses salary!:D Just a joke now, don't get steamed.

AztlanLC
08-25-2003, 07:42 PM
I always try to do that, cut my expenses, then I raised all my customer $2-5 and made about $100 more per week, now if you can cut your expenses $100 and raise your customers $2 you'll be ahead, now I'm at the point that I'm happy to have more expenses then before.

tiedeman
08-25-2003, 07:56 PM
Originally posted by Rustic Goat
What kind of employee expenses do you have, items that you furnish/pay for that might need to be cut down/eliminated?

Have you gone back over the books to see what kinds of things your buying that while nice to have are not necessities?

Of course you could always cut down on the bosses salary!:D Just a joke now, don't get steamed.

employee expenses are like: their uniforms, paid health insurance to full time workers, and paid cell phones. I am thinking about doing away with the cell phones though and only have 2 way.

I have went over the books made a list of eight things that I would like to cut and thought should be cut:

credit card fees, fuel, maintenance parts for equipment, workshirts, print cartridges, phone charges, cell phone charges, web site cost.

Rustic Goat
08-25-2003, 08:36 PM
Credit card fees? As in interest charges, or ATM transaction fees? Either are nasty bugs I'd spray with Raid right now.

Fuel & maintenance are what they are as long as you're not picking up any employee trip charges for non-job trips are ya?
Any trips being made that could be done more proficiently? No special trips just for ice, food, smokes, etc.

How much/many print cartridges are you really using? Printing what really needs to be printed, or are sheets being printed for some tid bit and then discarded in 2 minutes?

Phone, do you have regular type service, or did you buy a package with the bells & whistles. Do you really need call waiting if you have it?;)

Cell phones, I just don't like any crew to have one, JMO. I've yet to see anyone not abuse its use. If you must, maybe go two-way.

Web site. Probably untouchable. But do look at/consider the business it brings in vs cost. I know many get a lot of business from them, and others get squat.

Have written this as in I'm just thinking out loud, don't mean to make it sound as if you haven't already considered every bit of it, and of course it's all JMO.

Notice you didn't mention lowering the bosses salary any.:p

LawnLad
08-25-2003, 09:10 PM
Take a look at what the biggest expenses are that your business incurs. Labor is typically the largest line item, anywhere from 25% to 35%. How can you cut down on the labor and still maintain the work load? First place I'd look is your non-billable hours. You've already mentioned the fueling and loading/unloading.

Do you charge your customer's travel time? Perhaps you can do more portal to portal billing instead of curb side billing?

Overtime compensation is something you can cut out. If you have excessive overtime you can hire spot labor, a part time employee or maybe you're ready to add another full time employee. You'll save on the 50% plus the burden.

Make sure your material purchases are spot on - make sure you don't over buy for jobs.

Fuel is typically only 2% to 3%, very minor. I wouldn't beat yourself over this one. Or for that matter your smaller office purchases. It's wise of you to be conscience of them, but I wouldn't obcess over the really small things. All the energy you put into cutting the minor expenses could be refocused into the selling of new profitable jobs.

Spend time working on the job costing and the production rates for your work and see if you can tighten up the daily operation of your work to be as efficient as possible. Your use of PDA's shows that you're creative and willing to take some relatively unconventional approaches, I'm sure you'll find some more ways to tighten the belt.

Check insurance costs with your carrier. If you own trucks that are older do you really need to carry comprehensive or collision? Could you just cut back to liability? What if you raised your deductable?

tiedeman
08-25-2003, 09:48 PM
Originally posted by Rustic Goat
Notice you didn't mention lowering the bosses salary any.:p

;)

tiedeman
08-25-2003, 09:54 PM
I know that I am probably beating a dead dog to death, but I just want to try to maximize everything.

Like just yesterday I bought double window evenlopes so I don't have to have the business name and logo printed on the evenlopes. I used to only have single window, but now double.

I am actually looking over my invoices as well to see whether or not anything have to be taken off or deleted that eats up a lot of ink. I probably go through like 1 1/2 to 2 ink cartridges a month (ridiculous!!!)

dvmcmrhp52
08-25-2003, 11:54 PM
Personally I'd think about the cell phones too.2 way is fine.
you may need to communicate with employees but they don't need to talk with others on your time.Double savings.

Mike Bradbury
08-25-2003, 11:56 PM
Lots of companies are backing away from emailed business invoices (and other correspondences) due to the huge increase in SPAM. Lots of folks (myself included) zip through the huge list of emails and delete anything that doesn't look legit.
LOTS of legit stuff getting thrown out with the spam. Then YOU'RE PO'd at them for not getting paid, when they never "got" the bill. FWIW

GarPA
08-26-2003, 06:30 AM
Maybe you've already done this but in case you haven't, keep a minute my minute detailed work diary in your truck. Then at the end of 2 weeks, look at it closely and add up the billable time and the non billalble time(windshield time, fuel up time, etc...you might be surprised how much non billable time you are incurring...then try to reduce it. Here's something else we started last month....for some commercial properties, we now do a number of them on Sunday. Because of lack of cars, people, and conversations, our productivity on each commercial account done on Sunday, increased 10% to 15%. We work from about 8 to to 2 on Sundays. We dont have kids and my wife does not mind me working Sunday but this might not be an option for allot of guys, for various reasons, not the least of which is going to church.

As mentionted above, allot of our fixed and variable expenses are diffcult to reduce any further...so...I try to improve productivity which, in turn improves the bottom line . For example, we bought a couple of small augers for electric drills to plant the couple thousand flowers we did...these augers cut our planting time in half....but the fees to plant, stayed the same, therefore, our "expenses" to do this work were significantly reduced. I am always looking for tools/tricks that reduce labor time on the job.

We too, pack lunches...saves allot of time, we eat more nutritious food, and we can break for lunch at noon....when we used to buy lunch, I was always eating too late and then my wife had to move dinner back in the evening becuase I wasn't hungry at the "normal" supper hour.

Hope we hear some more ideas....this is a good thread you started

Rustic Goat
08-26-2003, 11:44 AM
Garpa, those are some good ideas. Getting creative with tool use works well as long as it doesn't abuse the tool, like the flower planting 'drill' idea.
Don't usually bother with a lunch, too dang hot.

tiedeman
08-26-2003, 12:33 PM
regarding the production and windshield time I think that I have just about totally got that down to the lowest that we can go.

The cell phone thing though is really weighing on my mind because I spend just about $180 a month for cell phones for employees. Sure when they go over the minutes it gets taken out of their paycheck, but I really only have one guy that uses the cellular minutes. We definetly though still need to stay in contact using the 2 ways throughout the season and especially during the winter time.

brentsawyer
08-27-2003, 06:17 PM
Buy a laser printer, will cost more upfront, but will save tremendously in the long run. I looked last winter for the best fit for me that was color. I got a Minolta for about $800. Still have 80% or more of all cartridges and I print all my designs off it in color. That alone could save $30+ per month for just printing everyday stuff. Then you could save even more money and time spent going back and forth to the printers for small batch runoffs. If color is not for you, you can get a B&W for half. Look on PC World for their recommendations and approx cost and do your shopping online. Alot of savings online for printers but make sure that you buy from someone reputable.

Dr. Mow
08-29-2003, 12:40 AM
do 2-3 yards every day by yourself,
25 - 35 per yard

30 x 2 = 60 / 60 x 5 = 300.00 per week with no labor to pay 300 / week = 1200 per month

cut labor do more work yourself.

tiedeman
08-29-2003, 01:04 AM
Originally posted by Dr. Mow
do 2-3 yards every day by yourself,
25 - 35 per yard

30 x 2 = 60 / 60 x 5 = 300.00 per week with no labor to pay 300 / week = 1200 per month

cut labor do more work yourself.

I have been doing landscaping maintenance for about 4 hours a day during the week and about 5 hours on Saturday to cut down labor expense

promower
08-31-2003, 04:26 PM
I dont know if cutting your laborers hours will help much. I know when I worked for a previous LCO if he said start coming in 2 hours later each day I wouldnt be very happy and would look for a new job. Thats about 10 less a week which be about $400 less per month. JMO but this approach may not go over to well with the help.

tiedeman
09-01-2003, 09:51 AM
I am not cutting down on their labor hours, I am cutting down on their overtime. My guys usually get around 45 to 47 hours a week

Rustic Goat
09-01-2003, 10:23 AM
Originally posted by tiedeman
I am cutting down on their overtime.
Sounds like a good move, and should be one that will make a great deal of difference in total overhead lowering. Going about this by better scheduling practices, changing routes, or is there deadwood on the crew?

If crew has gotten accustomed to the overtime, they probably will not take it very kindly. OT effects their pockets as well as yours, its reduction is a must do though.

Best wishes on your belt tightening, just don't get carried away and cut the circulation off to your lower extremities.:p

tiedeman
09-01-2003, 10:57 AM
believe this or not, but almost 80% of my employees have families and so they don't like the overtime. They like the extra pay, but they also like to get home earlier to spend with their families.

I had one guy last week (we pay bi-weekly) get 94.5 hours of work. Almost 15 hours of overtime. I am currently thinking about putting together another lawn crew as well or just wait until next year to do it.

I know what you mean by the deadwood, I am currently doing my quarterly evaluations this week. Should be interesting

DUSTYCEDAR
09-01-2003, 11:37 AM
u say u want to cut expenses and some overtime and then say u want to add another crew? wouldn't't that cost more than some overtime now and then? my point is u need more tools trucks and more paperwork for the employees will that crew bring in the money needed to support it.

MacLawnCo
09-01-2003, 11:48 AM
Tiedeman,

i think its time you looked into the compass system

Rustic Goat
09-01-2003, 01:40 PM
Originally posted by PJ Binder
wouldn't't that cost more than some overtime now and then?
PJB, you need to study a bit about production and the hourly rate system.
A stray OT hour once in a great while vs crews where one man gets as much as 15 hours OT is vastly different.
Your income for an OT hour is still the same income, it is not income at OT rates. You have to double income for a given hour of OT to pay for that OT.
It's a lose/lose situation, you're paying more and in effect getting paid less.
If you have 3 or 4 crews, each getting even a few hours of OT weekly, you can easily pay the expenses involved for adding another crew, plus the potential of expanding your customer base even more than is currently.
Two keys involved.
One, having enough business to keep all at work.
Two, have a NO OT rule, it really doesn't take much to put your profit % in a nose dive. As owner/boss/manager (what ever your title), it's your responsibility to make sure you have enough personnel & equipment to get the job done and that they are scheduled properly.

promower
09-01-2003, 03:49 PM
Well said

tiedeman
09-01-2003, 04:29 PM
Originally posted by Rustic Goat
PJB, you need to study a bit about production and the hourly rate system.
A stray OT hour once in a great while vs crews where one man gets as much as 15 hours OT is vastly different.
Your income for an OT hour is still the same income, it is not income at OT rates. You have to double income for a given hour of OT to pay for that OT.
It's a lose/lose situation, you're paying more and in effect getting paid less.
If you have 3 or 4 crews, each getting even a few hours of OT weekly, you can easily pay the expenses involved for adding another crew, plus the potential of expanding your customer base even more than is currently.
Two keys involved.
One, having enough business to keep all at work.
Two, have a NO OT rule, it really doesn't take much to put your profit % in a nose dive. As owner/boss/manager (what ever your title), it's your responsibility to make sure you have enough personnel & equipment to get the job done and that they are scheduled properly.

thank you, exactly what I was going to say

RyanD
01-05-2007, 09:35 AM
Fuel is typically only 2% to 3%, very minor.

Lawnlad, are you saying that your fuel makes up only 2-3% of your expenses? It seems my fuel was quite a bit more than that. I just started last year though. Perhaps not having a full schedule everyday will make the numbers increase a little. Or "loose" routes could be the culprit. But 2-3%, that sounds great.