“That’s just the cost of doing business.” You’ve probably heard this expression many times. It’s true that, to invoke another cliché, you’ve got to spend money to make money. But that doesn’t mean you have to take rising operational costs sitting down.
Cost control is a formal management technique through which you evaluate your company’s operations and isolate activities costing you too much money. This isn’t something you can do on your own — you’ll need a total team effort from your managers and advisers. Done properly, however, the results can be well worth it.
As McDonald’s owner/operators know, reining in G&A expenses is more important now than ever, and we work hand-in-hand with our clients to find ways to trim those costs without impacting the bottom line. Below are just some of the techniques we employ and recommend for owner/operators:
Asking tough questions
While performing a systematic review of the operations and resources, cost control will drive you to ask some tough questions. Examples include the following:
• Is the activity in question operating as efficiently as possible?
• Are we paying reasonable prices for supplies or materials while maintaining quality?
• Can we upgrade our technology to minimize labor costs?
A good way to determine whether your company’s expenses are remaining within reason is to compare them to current industry benchmarks.
Working with your team
There’s no way around it — cost-control programs take a lot of hard work. Reducing expenses in a lasting, meaningful way also requires creativity and imagination. It’s one thing to declare, “We must reduce shipping costs by 10 percent!” Getting it done (and keeping it done) is another matter.
The first thing you’ll need is cooperation from management and staff. Business success is about teamwork; no single owner or manager can do it alone.
In addition, best-in-class companies typically seek help from trusted advisors, like us here at Antares Group. We are deeply familiar with your business and the reporting standards of McDonald’s, and we have guided many owner/operators to a healthier G&A.
Staying in the game
An effective, ongoing program to assess and contain expenses can help you prevent both gradual and sudden financial losses while staying competitive in your market.
If you would like more information about how to control your G&A expenses, please contact us.