GIP14 Staying Profitable

Business Growth Radio - Solutions on Demand

Staying Profitable builds on Article 1 and drills down on 9 essential management disciplines for profitability. GIP Show 14 details the first Management Discipline - Line of Sight to Business Goals. Terms variable costsfixed costs Mindset On or Under BudgetFrugality Methods Hold a training session and educate everyone on how they affect profitability. Rearrange your calendar and make 2 hours a week for meetings - no excuses. 1 Hour for field supervisors and 1 hour for internal employees. Create or improve work orders (or whatever you want to call it) to include: (1) list of materials, the cost of the materials, a space for recording how much was used, a space to record why it is off budget; (2) list of employees working the job, estimated labor hours for the job, a space for how much was used, a space to record why it is off budget. Collect it at the end of the day. Once a week meet with supervisors to discuss the work orders. There only 2 reasons you are over budget - bad estimates or poor supervision. This will be awkward but it is a discipline. Soon the supervisors will know what is expected of them which will impact how they control work. Once a week meet with internal employees to discuss cutting costs. Pick a theme for the month, electrical usage for example, and challenge them to reduce it by 10%. Keep the theme until you have achieved the 10% or what is possible. Then move on to the next major cost area. Never stop, you are creating a culture of frugality that will increase profits.