ONE DEGREE Off ? Could Be Disastrous.
Not Paying Attention To Details?
The details of company logistics, products, product production, sales, marketing and on and on and on, come in various ways. I have not only consulted about company details, unfortunately I have had to live it.
Unfortunate, because having worked in these type of companies who try and hide the details or go around it, is foolishness. Upper management, NOT in the trenches, think that it is not that important.
Laughing at a VP who presented a pie chart and graphics showing their costs and excessive amount of spending didn’t go over well. When asked who created the evaluation, he named a third party consulting company. Then I asked, where did they get the numbers? From accounting he responded. Where did accounting get those numbers?
Not a word out of his mouth. Finally I said, well, are they invoices submitted as expenses? Yes he responded. Are all the invoices lumped into one account for that department by that location? Yes he said. Please tell me HOW you know that your cost is excessive? DO you have a bench mark to go off? Not really he said because they had acquisition two new companies since the last report.
Then I replied.
Their analysis is GARBAGE.
You cannot manage what you do not monitor,
was my reply. Their reports are only self serving to them. They did not provide any more insight than what you already had.
You have no clue to the justification of the spend if it is warranted or not. You want to make cuts, but you haven’t paid any attention to the details of the cost. By the way the cost was a 13 million dollars. Is it large and overwhelming, sure. BUT, all they know is this, it is Large and Overwhelming.
Probing some more.
Who has power to spend? What details of spending have you created? What limits are set for spending? Loading more and more questions on him, he finally said, this is why you are here. Then he asked me, can you cut expenses by $700,000.00?
Well in my experience, in similar situations, I would guess that 10% of costs would be in question to start. His eyes became wide and with excitement asked if I thought cutting 1.3 million out of that budget is really possible. Sure, but lets stick with the 700,000 and go from there.
After the first two months,
Finding low hanging fruit of $600,000.00 in excess spending, the costs were merely costs on quick action items. It was quick action items that turned in to the normal, instead of reverting back to the original way. Meaning we used to deliver this way, but we got busy and hired an outside source company and just kept paying them to do the job. See, that is easy. Over time, they added more and more from the outside carrier, increasing the cost, but not paying attention of company cost.
YET NO ONE in corporate questioned the spend. No one paid attention to it. Regional manager did it, that was good enough.
So, the details were skipped. It was an easy flow. No one bothered him about why he did it. He did it for a couple of years until I came on board.
The presented spreadsheet analysis of the $374,000 annual spend to the boss was a simple fix to bring it back to a $125,000 annual expense it should be. Sure it required a little more effort, but one little shift of one degree, sent the extra spending to $250,000 a year.
Like a frog in warm water, the outside source expense was only a part time haul here and there. That would be fine since the first month expense was around $1500.00 that grew to $31,000.00 and more, per month.
One Degree Makes a Difference
They were close to the runway and had already set their air brakes on the plane in preparation for landing. Having set the coordinates and thinking that all was good, they might have felt peace that the airplane will do its job and enter the airstrip as planned. BUT, it was dark outside and unable for the pilot and co-pilot to see the ground, alarms of hitting the ground with no runway in site would have been extremely disturbing.
The pilot took emergency maneuvers by accelerating and climbing. After review of the black box, it was determined that they would have cleared the mountain, if they would have removed the air brakes set earlier in preparation to land. They had almost cleared the top of the mountain, but the wheels hit the trees at the very top of the mountain and caused the plane to crash.
It was determined that the coordinates were one degree off. Sadly, that one degree killed everyone, but 5 people and one dog on board.
I know this analogy is extreme,
but I use it in an attempt to help you understand that this principle can be applied in business as well. A classic example is stated above in the opening paragraph.
What you need to realize in business is that you not only lost money paying for something, but you also lost the opportunity cost. We will not know the exact answer, but what could $250,000 in product sales made in dollars? 20 or 30%? Maybe? This is opportunity cost. The opportunity to make 20-30% was lost because we spent the money on expenses we didn’t need.
Luckily the million dollars discovered was not enough expense to crash the plane. (Figuratively speaking)
Frame Work Is Important
Please allow me to visit with you why I am in affiliate marketing.
After have many successful companies and companies that have failed, I realize that I can work on a project where I can minimize the cost of that company by tapping into something that is already created.
Like what?, you ask
We know of companies that WE may say, SURE, I would love to own a McDonald’s or Subway franchise. The money would be awesome. The proof of success is amazing. They are top franchise companies that appear to always show a profit.
That frame work is amazing. Details are in abundance.
I would like to do a franchise without all the cost up front. I mean who has $500,000 just sitting around? I didn’t and still don’t.
Find the Framework
So I began looking for a frame work that is established with a proven record that works. I wanted to become a partner in business, a partner in building by following their plan that has already been established and working. I wanted to talk to others who have followed the plan and are doing extremely well.
That plan was established by Internet Profits. Owner of that company is Dean Holland.
After reviewing what they had, talking to others who have had the success, I wanted in. I not only wanted in, but I wanted the ability to reach to the owner of the company and receive his help. With that, I also wanted Dean Holland to evaluate my process to make sure I am on track and to look at my monthly numbers to give direction as to what I am doing right and NOT doing right.
The joyful part is, I did not have to pay $500,000.00 upfront to start this.
I did not pay $15,000.00 even to get into this already established frame work.
I paid much less to become a partner and part of the company that has proven to be successful.
Here is a Clue for You.
You do not need to seek notoriety in a company before you move forward. If you only look for companies that you can easily find online, you will find companies that are so large and the personal touch will not be there, as well as extremely high costs to participate.
You will appreciate the personal touch that Dean Holland offers. Being taught by Russel Brunson, Dean’s success and experience works. If you think you need that popular company to earn money, that is fine, plan on spending plenty of dollars to get it.
As a past investor, and teacher to investing, I learned and discovered that the really successful winners in the market are the ones that bought companies who were nobodies at one time. I had clients who evaluated the direction of a company that had just went public and decided that a $10,000.00 stock purchase is not that bad. 5-10 years later, that stock is now worth millions and they cash in. BUT, on the other hand, I had clients put that same amount in the market, company went under and their stock is useless.
The bottom line is,
most of it was luck. The reason I say that is because clients were not involved in the day to day routine, so their research upfront looked really good, but over time, companies not staying true to their business plan/model failed. How would they know that if I am an investor? They don’t.
For that reason, I have very little in the market. I invest in me. I cannot remove ALL the risk, BUT with the framework I can control a good portion of the risk. The risk is there, but it is minimized risk with educational moves, not guessing with hope.
But hopeful, because of my research and efforts.
I started the same way that I am suggesting you to start.
Get the FREE Book, The Iceberg Effect.
That was the very beginning of my research into Dean Holland.
What kind of person is Dean Holland? He is a true business man, who through experiences of up and down was able to grow and build a framework of success. Now he offers that framework to you, and me and anyone that is willing to become a partner.
Why did I not go with Russel Brunson?
Because, I cannot afford Russell Brunson. Russell has reached that notoriety that makes it untouchable for me, and possibly you. He is not cheap, but his knowledge is deep and he is very successful.
Thank you for reading, please share your thoughts.