1. Working together to find
extra profit
Claudia Torelli
Director – Client Services
ctorelli@expensereduction.com
919-802-5840
2. How can you…
…find extra profit…
…with no loss in quality…
…with minimal impact on staff…
… at no additional cost to you…
…on a sustainable basis
3. About Expense Reduction Analysts
• Global consultancy firm focused on helping
clients increase their profits by reducing
G&A/non-core operating expenses.
• Network of more than 700 consultants
worldwide, with 250+ in the United States.
• Proprietary tools and benchmark data from
more than 14,000 cost-reduction projects.
• Find average savings of 20% in multiple G&A
expense categories, in 90% of the companies.
4. Lowering Non-core Costs can have a faster
and more direct impact in your bottom line
40% Sales 20% Cost
Today
Increase Reduction
Column1
Revenue $ 1,000 $ 1,400 $ 1,000
Direct operating costs $ 350 $ 490 $ 350
Labor costs $ 350 $ 490 $ 350
Non-core (indirect) costs $ 200 $ 280 $ 160
Net profit $ 100 $ 140 $ 140
A 20% cost reduction or a 40% sales increase would have a
similar effect in the profits line. Which one is more feasible?
5. Expense Categories we review
Logistics Supplies
• Small Package Freight • Chemical
• Domestic Freight • Cleaning
• International Freight • Food Services
Insurance • Lab and Medical
• General/Worker’s Comp • MRO/Factory Consumables
• Health • Packaging and Shipping
• Printing
Services
• Stationery and Office
• Equipment Maintenance
• Janitorial Services Telecommunications
• Payroll Processing • Data
• Printing • Mobile
• Records Management • Voice
• Temporary Labor Merchant Card Fees
• Information Technology Information Technology
• Uniforms
• Waste Management Leasing
6. Bottom line: Why engage ERA?
Results The best tools
We find and realize savings in 90% of • A systematic and proven process.
the companies that hire our services. • Cutting-edge proprietary analysis and
Average savings generated: 19.7% bidding tools.
No Financial Risk
• We operate on a contingency-fee model. Objectivity
Experience • Unbiased third party with no preferred
vendors.
• In business since 1992. • 100% of our revenues come from our share
• Operating in 30 countries. of savings generated for our clients.
• 700+ expense reduction consultants.
• More than 14,000 expense reduction
projects completed. Implementation
Expertise • We implement the authorized
• Reducing overhead expenses is all we do. recommendations, and audit and monitor
• Specialists on 30+ expense their results.
categories, with an insider’s understanding
of multiple industries.
8. Examples of savings
Distributor saved 13% on $315,000
courier expenses
Hidden savings of $40,000
$4,000 for every hour client invested
13%
13%
in project
Restaurants saved 17.8% on
$151,000 merchant card fees
Hidden savings of $27,000
17.8%
34%
$13,500 for every hour client invested
in project
9. Examples of savings
Distributor saved 35% on $100,000
telecommunications
Hidden savings of $35,000
$8,750 saved for every hour client
35% invested in project
Manufacturer saved 23% on $80,000
office products
Hidden savings of $18,400
$2,625 saved for every hour client
23% invested in project
10. When you combine industry expertise and
knowledge with best practices, you can
achieve sustainable cost reduction and
Find The Hidden Profits.
Claudia Torelli
919-802-5840
ctorelli@expensereduction.com
Editor's Notes
This table highlights the profit-making possibilities of reducing your non-core indirect cost by 20%. While every dollar saved is equivalent to a new dollar of profit, additional dollars of income are not. Applicable expenses must be deducted from the sales dollar to determine the remaining profit.To have the same effect on your firm’s business value, you would have to increase your sales by 40%The January 19, 2009 issue of fortune Magazine has an article entitled “How to Manage Your Business in a Recession” which sites McKinsey Research saying that they have found that in a typical S&P 1500 company, a price cut of 5% would have to generate increased sales volume of 19% in order to pay for itself – and that almost never happens.