How to Increase Your Business Profits by Mel Feller, MPA, MHR
There are two ways to increase your profits. One is by increasing your sales; the other is by reducing your costs. Here are some ideas that will help you increase your profits by cutting your expenses in an organized fashion.
Increasing profits through cost reduction must be based on the concept of an organized, planned program. Unless adequate records are maintained through a proper accounting system, there can be no basis for ascertaining and analyzing costs.
Cost reduction is not simply attempting to slash all expenses unmethodically. The owner-manager must understand the nature of expenses and how expenses inter-relate with sales, inventories, cost of goods sold, gross profits, and net profits.
English - 1 - Balancing cash cost and service. The supply chain triangle.Bram Desmet
This article fits in a series of articles inspired by the book ‘Supply Chain Metrics
That Matter’. In her latest book Lora Cecere introduces ‘which are the metrics that
matter’, ‘how to ensure strength, balance and resilience’, what are the ‘evolutions
in different sectors’, …
In this first article, Bram tries to find the balance via the Supply Chain Triangle of
Service, Cost and Cash. Next articles will define ‘how to set balanced targets’ and
‘how to make choices in function of a chosen business strategy’. We hope you
enjoy the reading.
English - 1 - Balancing cash cost and service. The supply chain triangle.Bram Desmet
This article fits in a series of articles inspired by the book ‘Supply Chain Metrics
That Matter’. In her latest book Lora Cecere introduces ‘which are the metrics that
matter’, ‘how to ensure strength, balance and resilience’, what are the ‘evolutions
in different sectors’, …
In this first article, Bram tries to find the balance via the Supply Chain Triangle of
Service, Cost and Cash. Next articles will define ‘how to set balanced targets’ and
‘how to make choices in function of a chosen business strategy’. We hope you
enjoy the reading.
If you don’t raise your margin now, you might never pull it off as good times can distract us all from what’s important. Many distributors operate under what we in Iowa call the “Make hey while the sun shines” mentality. We are so busy taking care of business, we fail to carry out the truly strategic actions needed for long term sustainability. There are few things more strategic than fixing our margin situation. Now is the perfect time.
Grey matter university introduction to e commerce financials - the basicsNed Barrett
In this lesson, we discuss how to construct and evaluate basic e-commerce profit and loss statements. This is especially helpful for companies or individuals who are trying to start a new e-commerce business or who are trying to add sophistication and financial diagnostics to an existing business.
Resources from Business Victoria's seminar explains how many new business owners are surprised to find that although they are making a profit, without adequate cash flow their business will struggle to survive.
As the owner or buyer of a retail store, you have the Art of buying: you know WHAT to buy. This presentation will tell you more about the Science part of buying: HOW MUCH to buy and WHEN to bring it in.
Email or call for any question you may have.
Mel feller looks at creating a more profitable businessMel Feller
Mel Feller Looks at Creating a More Profitable Business
Making a profit is the most important - some might say the only - objective of a business. Profit measures success. It can be defined simply: Revenues - Expenses = Profit. Therefore, to increase profits you must raise revenues, lower expenses, or both. To make improvements you must know what is really going on financially at all times. You have to watch every financial event without any kind of optimistic filter.
This article is a series of questions with comments to help you analyze your profits, their sufficiency and trend, the contribution of each of your product lines or services to them, and to help you determine if you have the kind of record system you need. The questions and comments are not meant to be definitive presentations on the subjects.
If you don’t raise your margin now, you might never pull it off as good times can distract us all from what’s important. Many distributors operate under what we in Iowa call the “Make hey while the sun shines” mentality. We are so busy taking care of business, we fail to carry out the truly strategic actions needed for long term sustainability. There are few things more strategic than fixing our margin situation. Now is the perfect time.
Grey matter university introduction to e commerce financials - the basicsNed Barrett
In this lesson, we discuss how to construct and evaluate basic e-commerce profit and loss statements. This is especially helpful for companies or individuals who are trying to start a new e-commerce business or who are trying to add sophistication and financial diagnostics to an existing business.
Resources from Business Victoria's seminar explains how many new business owners are surprised to find that although they are making a profit, without adequate cash flow their business will struggle to survive.
As the owner or buyer of a retail store, you have the Art of buying: you know WHAT to buy. This presentation will tell you more about the Science part of buying: HOW MUCH to buy and WHEN to bring it in.
Email or call for any question you may have.
Mel feller looks at creating a more profitable businessMel Feller
Mel Feller Looks at Creating a More Profitable Business
Making a profit is the most important - some might say the only - objective of a business. Profit measures success. It can be defined simply: Revenues - Expenses = Profit. Therefore, to increase profits you must raise revenues, lower expenses, or both. To make improvements you must know what is really going on financially at all times. You have to watch every financial event without any kind of optimistic filter.
This article is a series of questions with comments to help you analyze your profits, their sufficiency and trend, the contribution of each of your product lines or services to them, and to help you determine if you have the kind of record system you need. The questions and comments are not meant to be definitive presentations on the subjects.
Mel feller and multiple secrets to successMel Feller
eminars with Coaching for Success 360, Inc. and Mel Feller Coaching. Mel Feller maintains offices in Texas and Oklahoma.
Like you, leadership expert and business author Mel Feller has seen the word leadership defined numerous ways over the years. Is it charisma and positive thinking? Pinstripes and red power ties? Decisiveness? Is it all about the situation? Is it meant only for the elite who rise to the top? Alternatively, is there a different story?
With over three decades of executive coaching, speaking, and most importantly, real-life, in-the-trenches business experience, his view is radically different. Mel Feller appreciates, and shares with listeners, that leadership is a moment-to-moment choice and not about title, tenure or position. Leadership is for everyone, every day. It is how we should live our life
Mel feller mpa, mhr, discusses texas real estateMel Feller
Mel Feller MPA, MHR, Discusses Texas Real Estate and Terms to Know
Mel is the President/Founder of Mel Feller Seminars with Coaching for Success 360, Inc. and Mel Feller Coaching. Mel Feller is an Innovator and Business Leader. Mel Feller currently maintains an office in Texas. Mel is currently an MBA Candidate.
Why should I buy, instead of rent?
You will love the feeling of having something that is all yours - a home where your own personal style will tell the world who you are. A thriving vegetable garden in the backyard, a tiled entryway, a yellow kitchen... when you own, you can do it all your way! However, there is more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too. And interest will compose nearly all of your monthly payment, for over half the number of years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. Moreover, you are allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and it is gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.
Mel Feller, MPA, MHR, is a well-known real estate, business consultant, personal development
Consultant and speaker, specializing in performance, productivity, and profits. Mel is the President/Founder of Mel Feller Seminars with Coaching For Success 360, Inc. and Mel Feller Coaching, a real estate and business specific coaching company. His three books for real estate professionals are systems on how to become an exceptional sales performer. His four books in Business and Government Grants are ways to leverage and increase your business Success in both time and money! His book on Personal Development “Lies that Will Sabotage Your Success”.
Mel feller, mpa, mhr, asks about your passionMel Feller
Mel Feller, MPA, MHR, Asks About Your Passion.
Mel is the President/Founder of Mel Feller Seminars with Coaching for Success 360, Inc. and Mel Feller Coaching. Mel Feller maintains offices in Texas and in Utah.
The dictionary definition of passion is, “a strong or extravagant fondness, enthusiasm, or desire for anything.” Why do people start their own businesses? Is it for money, for freedom – from corporate structure or otherwise, power? What would you want to do it if you did not need to work? Some people might answer that they would want to lie on a beach or watch television, all day that might not pay you! However, is it possible to do something you would want to do whether or not you were making money – and actually make money? Of course – but if it were that easy, everyone would be doing it.
I have always suggested you should do what you love, but I had not followed my own advice sometimes. Why is it so important to pursue what is important to you? Here is what I have learned since deciding to focus on my passion:
Mel feller, mpa, mhr, discusses word of mouth marketingMel Feller
Mel Feller, MPA, MHR, Discusses Word of Mouth Marketing.
Mel is the President/Founder of Mel Feller Seminars with Coaching for Success 360, Inc. and Mel Feller Coaching. Mel Feller maintains offices in Texas and in Utah.
It is as important to know what word of mouth marketing IS as what it IS NOT. Word-of-Mouth (W-O-M) is about involving, educating and satisfying customers. It is not about abandoning your marketing plan and advertising campaign. It is not enough to simply provide good customer service and wait for the buzz to build. In fact, let us test your knowledge of W-O-M with this simple quiz. Select the most suitable answer to the following questions. Answers are at the end of the handout/article.
Mel Feller, MPA, MHR, is a well-known real estate, business consultant, personal development consultant and speaker, specializing in performance, productivity, and profits. Mel is the
President/Founder of Mel Feller Seminars with Coaching For Success 360, Inc. and Mel Feller Coaching, a real estate and business specific coaching company. His three books for real estate professionals are systems on how to become an exceptional sales performer. His four books in Business and Government Grants are ways to leverage and increase your business Success in both time and money! His book on Personal Development “Lies that Will Sabotage Your Success”. Mel Feller is in Texas and In Utah. Currently an MBA Candidate
Success Sabotaging Lies
By Mel Feller, MPA, MHR Offices in Texas and Utah
Let me start by asking a couple of questions, what beliefs do you have about success and personal excellence? What programs do you have downloaded in the massive computer that is known as your brain? Are they a plus in your pursuit for self-help motivation and personal growth development? On the other hand, are they holding you back and controlling what you will be able to achieve?
We have heard the opposite of the terms I have listed. Replace the opposite thoughts of these with these success belief builders. I wanted to point out the positive and not the negative.
There Is No Such Thing as Failure
The men who try to do something and fail are infinitely better than those who try to do nothing and succeed. Lloyd Jones
Notice the difference between what happens when a man says to himself, “I have failed three times,” and what happens when he says, “I am a failure.” ~S.I. Hayakawa
There is a man who failed in business at age 21.
He was defeated in a legislative race at age 22.
He failed again in business at age 24.
He overcame the death of his girlfriend at age 26.
He had a nervous breakdown at age 27.
He lost a congressional race at age 34.
He lost a congressional race at age 36.
He lost a senatorial race at age 45.
He failed in an effort to become vice-president at age 47.
He lost a senatorial race at age 49.
He was elected president of the United States at age 52.
The man’s name was Abraham Lincoln.
He would not have accomplished becoming president if he had believed that failure was something to avoid. Thomas Edison thought the same way about failure when going through his 9,999 attempts to invent the light bulb.
Mel fellers multiple secrets to success Mel Feller
Mel Feller’s Multiple Secrets to Success – Look at the Seasons in Your Life
Mel Feller, MPA, MHR with Offices in Texas and Utah
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
See www.melfeller.com and www.melfellersuccessstories.com
Mel Feller Professional Coaching in Dallas, TX and Salt Lake City, UT
Mel's success philosophy is one where there are many avenues to achieve success. He specializes and trains in real estate, business planning, stocks, personal development, leadership, time management, grants, proposal funding and relationship training
Are you worried that feel that you are lacking motivation in your everyday life or your business?
A collection of inspirational quotes by mel fellerMel Feller
A Collection of Inspirational Quotes by Mel Feller
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
Power, Success and Value Creation
***
Happiness is that state of consciousness which proceeds from the achievement of one’s values.
-- Ayn Rand
Mel Feller and Coaching For Success 360 – Coaching – Consultant - Training
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
Coaching For Success 360 is a full service management, coaching and consulting firm specializing in all and every type of business coaching, training, and development. Experienced coaches and consultants provide solutions to tough business problems and the leadership needed to significantly enhance a company´s performance and productivity. Our specialties and offered programs are in the area of executive coaching, business development, and team building involving all sizes of businesses including real estate.
Coaching For Success 360 and Mel Feller have found that the standard cookie cutter training and development does not adequately address the needs of team and leadership development. Their established programs incorporating personal assessments, sound methodology, and hard questioning accelerates development, and ensures growth.
Build a Successful Financial Plan
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
Financial planning is defining your goals in life and realizing that the only way to provide for them is through disciplined spending, regular saving, and wise investing. It isn’t a blueprint for life that once drawn never changes. It is flexible and adaptable to your changing needs. Moreover, best of all, you can accomplish it at any income level.
A sound financial plan includes both short- and long-term goals. It starts with the realization that, in the early and even middle years of life, you must develop the habit of saving. Only by living below your means can you build a fortress of savings to pay for the important things that lie ahead.
Successfully Reducing Insurance Costs
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
Have you looked at your insurance costs lately? Chances are, your costs have gone up even if your coverage has remained the same. Insurance inflation is a hidden danger because you do not always pay those bills every month or pay them directly. In addition, when they do rise, there seems to be no practical way to control them. Let’s look at some major insurance categories to see where cost-cutting might be possible.
Return Balance To Your Life
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
In order to return balance to your life, remove the excuses from your life.
Attitude is more important than intelligence. The reasons why you can do anything must replace the reasons why you can`t. Find ways to win not to lose. Winning attitude that were once very easy may become more difficult with age.
Looking at a 1031 Exchange
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
Let’s look at 1031 tax deferred exchanges. Named after the IRS tax code that permits such transactions, 1031 exchanges allow investors to defer paying taxes on property they buy and sell as long as the transactions occur within a 180-day time span and the funds are placed with an exchange facilitator or accommodator. I cannot stress enough the importance of working with a ‘qualified’ qualified intermediary, or QI. While knowledge, experience and a certain level of coverage or fidelity coverage is significant, the financial backing of the company, strict adherence to financial reporting and disclosure requirements hold even more importance.
How to Become Wealthy
By Mel Feller, MPA, MHR
Mel Feller Seminars, Coaching For Success 360 Inc. /Mel Feller Coaching
Napoleon Hill, in his great book, Think & Grow Rich, describes the six steps to turn your “desires into gold.”
First: Determine exactly how much money you want to accumulate.
Second: Determine exactly what you will do to get this money.
Third: Establish the date by which you will do this.
Fourth: Create a definite plan to accumulate this money.
Fifth: Write out a clear, concise goal statement.
Sixth: Keep your goal statement at the top of your mind.
Mel feller looks at how real estate agents should treat their clientsMel Feller
Mel Feller Looks at How Real Estate Agents Should Treat Their Clients
Please note that this article comes from the heart. It is heartfelt because I had been a top producing real estate agent for twenty years. I know what it takes to keep buyers and sellers happy and still as a real estate investor, I handle a lot of my buying and selling myself even though I do not have a real estate license today. I am deeply involved in training several high producing real estate agents today. So my knowledge of the real estate field spans over 45 years. No matter who your customer is, in any business, they turn into repeat customers down the road or not, depending on the way you choose to treat them!
Real Estate Agents who treat buyers with disdain would do well to remember that those buyers would become sellers one day. In addition, they will remember those agents who treated them well when they were initially looking to purchase. If you happen to be the Buyer’s Agent always, treat them with the highest respect, just the way you would like to be treated. I can promise you that no real estate agent will admit to treating people badly, but I do see and hear about it all the time.
Mel feller asks if you are in the wrong careerMel Feller
Mel Feller Asks if you are in the Wrong Career
” Passion for your work, a pervasive commitment to quality, and relentless attention to details are essential markers of excellence. Quality work and an appreciation for the importance of details benefit not just the clients a business serves; these attitudes and habits also bring joy and peace of mind to the person who delivers the work. To know how to do something exceptionally well is to enjoy it. “Everything Counts: 52 Remarkable Ways to Inspire Excellence and Drive Results by Gary Ryan Blair
Sales can be a tough career.
We face rejection daily, doing most of our presenting in unfamiliar territory. We know that we are only as good as our last order, meaning that if we don’t sell, we don’t eat. In addition, like every other ‘civilian’ we have bills to pay. On days without results most days for many, it can be extremely stressful.
Mel feller looks at building a winning teamMel Feller
Mel Feller Looks at Building a Winning Team in Real Estate
If you are like many agency leaders, you probably began your career in Sales. In addition, the fact that you now own your own agency means that more likely you were good at it.
This ability is actually a two-edged sword. On one hand, you have the ability to train your salespeople and, if you can make them even seventy percent as good as you can, you would be very happy. Well, that is what most leaders say.
However, there is a downside: while you are trying to get your salespeople ‘up to speed’ there are bills to pay, and often the salespeople you have are not making sufficient sales to do it.
Mel feller wants you to become a great real estate salespersonMel Feller
Mel Feller wants you to Become a great Real Estate Salesperson
Imagine a friend came up to you and said, “I want to be a great salesperson. What do I have to do?” What would you say?
Quite often, we are better at solving other people’s problems than we are our own. Caught up as we are in the day-to-day business of being us, our own problems seem huge, while we can clearly see what others should be doing.
So solve this problem for your ‘friend’. What does this person have to do to be a great salesperson? Write down the formula. Do it now.
Mel feller gives you a home loan glossaryMel Feller
Mel Feller Gives You a Home Loan Glossary
Home Loan Glossary
Adjustable-rate loans, also known as variable-rate loans, usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates rise, generally so do your loan payments; and when interest rates fall, your monthly payments may be lowered.
Mel Feller and Why I am a business and Executive Coach
I started coaching in the early eighties. It was during that time that I began working with Carleton Sheets, author of the bestselling Real Estate Courses No Money Down Real Estate and founder of one of the longest coaching programs in history.
Carleton’s approach was not teaching or therapy. It was a broadly applicable system for helping individuals “create real estate wealth.” Based on recognizing deep patterns that prevent long-term success, and skills for creating new patterns that produce “results that truly matter,” Carleton’s techniques helped me successfully coach clients as diverse as single mom’s on welfare to aspiring professionals, entrepreneurs and Fortune 500 Executives.
Mel Feller Discusses PR Techniques
One of the least understood, most underutilized marketing techniques in the business world is public relations. That fact represents an opportunity for small business owners and managers who are willing to devote a little time to cultivating relationships with reporters and editors in their community.
Advertising is the obvious approach to self-promotion, so a lot of your competition is doing it. Generating free or inexpensive publicity through press releases and media relations is not as commonplace, so it offers a much more uncluttered arena for gaining visibility and name recognition. The 'cost of admission' consists of a newsworthy story and a little insight into how the process works.
Best Crypto Marketing Ideas to Lead Your Project to SuccessIntelisync
In this comprehensive slideshow presentation, we delve into the intricacies of crypto marketing, offering invaluable insights and strategies to propel your project to success in the dynamic cryptocurrency landscape. From understanding market trends to building a robust brand identity, engaging with influencers, and analyzing performance metrics, we cover all aspects essential for effective marketing in the crypto space.
Also Intelisync, our cutting-edge service designed to streamline and optimize your marketing efforts, leveraging data-driven insights and innovative strategies to drive growth and visibility for your project.
With a data-driven approach, transparent communication, and a commitment to excellence, InteliSync is your trusted partner for driving meaningful impact in the fast-paced world of Web3. Contact us today to learn more and embark on a journey to crypto marketing mastery!
Ready to elevate your Web3 project to new heights? Contact InteliSync now and unleash the full potential of your crypto venture!
Explore Sarasota Collection's exquisite and long-lasting dining table sets and chairs in Sarasota. Elevate your dining experience with our high-quality collection!
How to Build a Diversified Investment Portfolio.pdfTrims Creators
Building a diversified investment portfolio is a fundamental strategy to manage risk and optimize returns. For both novice and experienced investors, diversification offers a pathway to a more stable and resilient financial future. Here’s an in-depth guide on how to create and maintain a well-diversified investment portfolio.
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Explore Tradeasia’s brochure for eco-friendly textile chemicals. Enhance your textile production with high-quality, sustainable solutions for superior fabric quality.
When listening about building new Ventures, Marketplaces ideas are something very frequent. On this session we will discuss reasons why you should stay away from it :P , by sharing real stories and misconceptions around them. If you still insist to go for it however, you will at least get an idea of the important and critical strategies to optimize for success like Product, Business Development & Marketing, Operations :)
Reflect Festival Limassol May 2024.
Michael Economou is an Entrepreneur, with Business & Technology foundations and a passion for Innovation. He is working with his team to launch a new venture – Exyde, an AI powered booking platform for Activities & Experiences, aspiring to revolutionize the way we travel and experience the world. Michael has extensive entrepreneurial experience as the co-founder of Ideas2life, AtYourService as well as Foody, an online delivery platform and one of the most prominent ventures in Cyprus’ digital landscape, acquired by Delivery Hero group in 2019. This journey & experience marks a vast expertise in building and scaling marketplaces, enhancing everyday life through technology and making meaningful impact on local communities, which is what Michael and his team are pursuing doing once more with Exyde www.goExyde.com
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
Salma Karina Hayat is Conscious Digital Transformation Leader at Kudos | Empowering SMEs via CRM & Digital Automation | Award-Winning Entrepreneur & Philanthropist | Education & Homelessness Advocate
How to increase your business profits by mel feller
1. How to Increase Your Business Profits by Mel Feller, MPA, MHR
There are two ways to increase your profits. One is by increasing your sales; the other is by
reducing your costs. Here are some ideas that will help you increase your profits by cutting your
expenses in an organized fashion.
Increasing profits through cost reduction must be based on the concept of an organized,
planned program. Unless adequate records are maintained through a proper accounting
system, there can be no basis for ascertaining and analyzing costs.
Cost reduction is not simply
attempting to slash all expenses
unmethodically. The owner-manager
must understand the nature of
expenses and how expenses inter-
relate with sales, inventories, cost of
goods sold, gross profits, and net
profits.
Cost reduction does not mean only the reduction of specific expenses. You can achieve greater
profits through more efficient use of the expense dollar. Some of the ways you do this are by
increasing the average sale per customer, by effectively using display space and thereby
increasing sales volume per square foot, by getting a larger return for your advertising and sales
promotion dollar, and by improving your internal methods and procedures.
Profit is in danger when good merchandising and cost control do not go hand in hand. A big
sales volume does not necessarily mean a big profit, as one retailer, Carl Jones, learned.
Jones's pride was stocking stylish and well-assorted lines of merchandise. Each year, sales
volume increased. This increase was attributed to good merchandise that Jones felt took care of
the steady rise in expenses.
How to Increase Your Business Profits by Mel Feller
2. Nevertheless, Mr. Jones began to have doubts when he found it necessary to get bank loans
more often than had been his practice. When he discussed the problem with his banker, Jones
was advised to check expenses. As the banker said, "A large and increasing sales volume often
creates the appearance of prosperity while behind-the-scene expenses are eating up the
profit."
Paying the Right Price
Your goal should be to pay the right price for prosperity. Determining that price for your
operation goes beyond knowing what your expenses are. Reducing expenses to increase profit
requires you to obtain the most efficient use of the expense dollar.
Look, for example, at the payroll expense. Salesclerks are paid to sell goods, and their
productivity is the key to reducing the payroll cost.
If you train a salesclerk to make multiple sales at higher unit prices, you increase productivity
and your profits without adding dollars to your payroll expenses. Or, if four salesclerks can be
trained to sell the amount previously sold by seven, the payroll can be cut by three persons.
An understanding of the worth of each expense item comes from experience and an analysis of
records. Adequate records tell what has happened. Their analysis provide facts that can help
you set realistic goals; you are paying the right price for your store's prosperity.
Analyze Your Expenses
Sometimes you cannot cut an increase item. However, you can get more from it and thus
increase your profits. In analyzing your expenses, you should use percentages rather than
actual dollar amounts. For example, if you increase sales and keep the dollar amount of an
expense the same, you have decreased that expense as a percentage of sales. When you
decrease your cost percentage, you increase your percentage of profit.
On the other hand, if your sales volume remains the same, you can increase the percentage of
profit by reducing a specific item of expense. Your goal, of course, is to do both: to decrease
specific expenses and increase their productive worth at the same time.
3. Before you can determine whether cutting expenses will increase profits, you need information
about your operation. This information can be obtained only if you have an adequate
recordkeeping system. Such records will provide the figures to prepare a profit and loss
statement (preferably monthly for most retail businesses), a budget, break-even calculations,
and evaluations of your operating ratios compared with those of similar types of business.
Break-even
A useful method for making expense comparisons is break-even analysis. Break-even is the
point at which gross profit equals expenses. In a business year, your sales volume has become
sufficient to enable your over-all operation to start showing a profit at the time. The two
condensed profit and loss statements, in the accompanying example, illustrate the point. In
statement "A", the sales volume is at the break-even point and no profit is made. In statement
"B" for the same store, the sales volume is beyond the break-even point and a profit is shown.
In two statements, the percentage factors are the same except for fixed expenses, total
expenses, and operating profit.
A B
Break-Even Percent Profit Percent
Amount of sales Amount of sales
Sales 500,000 100 600,000 100
Cost of Sales 300,000 60 360,000 60
_______ ___ _______ ___
Gross Profit 200,000 40 240,000 40
_______ ___ _______ ___
Operating Expenses
Fixed 150,000 30 150,000 25
Variable 50,000 10 60,000 10
_______ ___ _______ ___
Total 200,000 40 210,000 35
_______ ___ _______ ___
Operating Profit $ NONE 0 30,000 5
As shown in the example, once your sales volume reached the break-even point, your fixed
expenses are covered. Beyond the break-even point, every dollar of sales should earn you an
equivalent additional profit percentage.
4. It is important to remember that once sales pass the break-even point, the fixed expenses
percentage goes down as the sales volume goes up. In addition, the operating profit percentage
increases at the same rate as the percentage rate for fixed expenses decreases - provided, of
course, those variable expenses are kept in line. In the illustration, fixed expenses in Statement
"B" decreased by 5 percent and operating profit increased by 5 percent.
Locating Reducible Expenses
Your profit and loss (or income) statement provides a summary of expense information and is
the focal point in locating expenses that can be cut. Therefore, the information should be as
current as possible. As a report of what has already been spent, a P and L statement alerts you
to expense items that bear watching in the present business period. If you get a P and L
statement only at the end of the year, you should consider having one prepared more often. At
the end of each quarter might be often enough for some firms. Ideally, you can get the most
recent information from a monthly P and L.
Regardless of the frequency, for the most information two P and L statements should be
prepared. One statement should report the sales, expenses, profits and/or loss of your
operations cumulatively for the current business year to date. The other should report on the
same items for the last complete month or quarter. Each of the statements should also carry
the following information:
(1) This year's figures and each item as a percentage of sales.
(2) Last year's figures and the percentages.
(3) The difference between last year and this year - over or under.
(4) Budgeted figures and the respective percentages.
(5) The difference between this year and the budgeted figures - over and under.
5. (6) Average percentages for your line of business (industry operating ratio) when available, and
(7) The difference between your annual percentages and the industry ratios - under or over.
This information allows you to locate expense variation in three ways: (1) by comparing this
year to last year, (2) by comparing expenses to your own budgeted figures, and (3) by
comparing your percentages to the operating ratios for your line of business. The important
basis for comparison is the percentage figure. It represents a common denominator for all
three methods. When you have indicated the percentage variations, you should then study the
dollar amounts to determine what line of operative action is needed.
Because your cost cutting will come largely from variable expenses, you should make sure that
they are flagged on your P and L statements. Variable expenses are those that fluctuate with
the increase or decrease of sales volume. Some of them are advertising, delivery, wrapping
supplies, sales salaries, commissions, and payroll taxes. Fixed expenses are those that stay the
same regardless of sales volume. Among them are your salary, salaries for permanent non-
selling employees (for example, the bookkeeper), depreciation, rent, and utilities.
Taking Action
When you have located a problem expense area, the next step obviously is to reduce that cost
to increase your profit. A key to the effectiveness of your cost-cutting action is the worth of the
various expenditures. As long as you know the worth of your expenditures, you can profit by
making small improvements in expenses. Keep an open eye and an open mind. It is better to do
a spot analysis once a month than to wait several months and then do a detailed study. Take
action as soon as possible. You can refine your cost-cutting action as you go along.
6. Mel Feller, MPA, MHR, is a well-known real estate, business consultant, personal development
consultant and speaker, specializing in performance,
productivity, and profits. Mel is the President/Founder of Mel
Feller Seminars with Coaching For Success 360, Inc. and Mel
Feller Coaching, a real estate and business specific coaching
company. His three books for real estate professionals are
systems on how to become an exceptional sales performer. His
four books in Business and Government Grants are ways to
leverage and increase your business Success in both time and
money! His book on Personal Development “Lies that Will
Sabotage Your Success”. Mel Feller is in Texas and In Utah.
Currently an MBA Candidate.