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The founder of Clothing 4 All is also the author of this
book. The foundation of Clothing 4 All is built upon the
productivity / cost containing ideas that make up this
book, which covers the back end of this business. The
customer service portion of Clothing 4 All is based upon
the principles of Service Marketing.
A high percentage of the customers @ Clothing 4 All are
businesses. In these difficult times, it is only
reasonable that Clothing 4 All does what it can to help
its customers continue to be successful and to reach out
to businesses who purchase apparel to consider Clothing
4 All as a new supplier. One way to earn that new
business is to share our secrets of success in keeping
costs down in a productive manner.
Cut costs without
cutting staff. Make your business lean and green without
limiting your ability to grow and to respond to an
ever-changing marketplace. Learn to turn your waste into
profit, to cut overhead costs, to negotiate the best vendor
contracts, to manage maintenance costs, to get the most out of
service contracts, and to minimize freight costs. This book
will take you through the maze of cost containment step by
step.
While cost containment is not as seemingly glamorous as
sales or product introductions, cost containment is going to
be a primary factor in both profitability and customer
satisfaction, during the foreseeable future. Having been
overlooked by most firms, the management of all expenses will
eventually result in lower cost of product to customers,
increased wages for employees, increased earnings for owners,
increased sales, and greater quality of goods and/or services
offered. In fact, whether your support overhead can be traced
to facilities maintenance, capital equipment, or supplies,
your cost of sales could be reduced by a range of 10% - 50%!
Facilities managers and manufacturers should be looking at
Total Productive Maintenance (TPM) as a means of getting to
the 50% level. For almost all firms, profitability could
easily double by paying attention to cost containment.
THE 4 W'S OF COST CUTTING
Why - In an uncertain economy, which presently the
United States and the rest of the world are in the midst of,
it is difficult to increase sales. Sales are difficult to
increase, whether you are a CPA firm or a manufacturer, due to
fierce competition and reduced demand. An increase in sales
during this sluggish economy can usually be obtained only by
lowering prices.
As it is difficult to grow the business by increasing sales, a
loss of business is likely if prices are raised. You cannot
increase prices, because customers can and will go elsewhere
to buy. Customers are not loyal to firms, but are very loyal
to genuine value and are very price conscious.
Caught between a rock (minimal or no increases in sales or
prices) and a hard place (tax increases, health cost
increases, wage increases, materials increases), your margins
are getting slimmer by the month. For many firms, it has
become difficult, if not impossible to generate the profits
from which to pay rent, taxes, and salaries. Many firms have
already done the obvious staff cutting and have no one left
who are not vital to the running of the business. These
managers are faced with an ugly decision of determining which
portion of their business they can do without or with less, be
it a reduced accounting, maintenance, or sales department.
That decision must be made with the knowledge that a further
erosion in customer satisfaction, sales and/or profit could
result. Obviously, the firm will suffer from reduced morale
and productivity. Further reductions would harm the business.
What - The accurate and timely recording of data,
processed into meaningful information, will give managers the
proper tools. Coupled with the knowledge contained within the
concise chapters of this book, the process or result, will be
more informed decisions by managers in the area of support
expenses.
Where - Cost cutting should be evaluated at every level
of a business. It should start with the top of the
organization on down, AND from the bottom of an organization
on up. When the profits of a firm are spent unnecessarily, it
means that dollars are forever lost and cannot be made
available for wages. An incentive plan to save should be
introduced. Shared sacrifice should be rewarded, and not
merely pocketed by the owners. If employees agree to implement
a plan to reduce a popular but unnecessary expenditure, they
should be given a percentage of that savings. Incentives yield
results. Within an incentive based environment, friendly
competition oftentimes results between departments. A
newsletter or other means of communicating the cost-cutting
achievements of others should be utilized. No act should be
too trivial to be recognized. Of course, senior managers
receive more perks and earn more, so they have more to give.
Switching from paper cups to a person's cup from home, should
receive just as much notice as when the senior manager gives
up plants and/or flowers or the company car.
When - The time to act is now. Even if your firm is
doing great, everyone, from the temporary staff to the owners
of the firm could get used to an increase in income/earnings.
Typically, people are reluctant to change anything, until a
catastrophic event happens. Then, while putting out
organizational fires, these same individuals are too stressed
to contemplate any procedural changes.
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