The Gainesville Health & Fitness Centers (GHF) has three sites in Gainesville, Fla. that, taken together, total more than 100,000 square feet of space and serve some 27,000 members. GHF actively cultivates what I describe as a “culture of savings.” Every employee is aware of, and plays an active role in addressing budgetary issues — they’re also rewarded for submitting cost-cutting ideas. All of the managers are trained, in effect, to be the CEO of their department. Each year, they attend a three-day retreat, where they review strategic objectives, set goals and create their budgets. Then, every week, they’re expected to suggest new ways to improve the company’s bottom line. A different vendor is reevaluated each month, and GHF conducts a thorough audit at the end of the year. We’ve reduced our annual expenses hundreds of thousands of dollars over the last three years, while improving our level of customer service and remaining true to our values, mission and core purpose. Follow these simple steps and perform your own “Expense and Cost Savings Audit.”
1. Write down where you have cut costs in the last three years and how much was saved: Look over the following areas — Where are your opportunities to reduce costs? Check off areas where you have not recently renegotiated the costs.
- Energy
- Lease
- Insurance
- Cleaning
- Supplies
- Equipment
- Health care
- Credit card transaction charges
- Bank charges
- Real estate taxes
- VoIP vs. land line phone
- TI lines to internet
- Refinance loans
- Media audits if you use radio or TV
2. Add other areas to consider re-negotiating.
3. Inefficiency: Check off areas where your business is inefficient.
- Waste
- Bureaucracy, bottlenecks
- Duplicate work
- Overlapping staff
- Too many staff with no work
- Rework, errors
- Checking
- Paperwork
4. Cost of appraisal: Can these be managed, designed or systematized so they do not need appraisal time?
- Checking up on staff
- Approving/concurring/authorizing costs
- Invoicing review
- Time-card review
- More than one manager’s signature on a document
5. Cost of failure: Can these be managed, designed or systematized so they do not fail?
- Information failures (incorrect, insufficient, late)
- Equipment repair
- Negotiating with dissatisfied customers
- Refunds
- Warranty claims
- Litigation
- Repair/rework
- Bad debt increase
6. Cost cutting action plan:
- Area of concern?
- What do I need to get this started?
- When will I launch?
- Costs?
- Anticipated savings?
7. Cost saving tactical plan:
- Area to examine?
- Who negotiates?
- How often?
- Last time this was done?
8. Do you have a plan for a business recession? What do you do if you do no make your numbers? Creativity goes down the drain when you are in an emergency. You must have a plan that allows you to have previously thought through what would happen if you had to take a 20 to 35 percent revenue cut.
9. What do you do to provide hope? Ideas from previous audits:
- Stop all capital expenditures
- Stop development
- Discount selling
- Shorten hours
- Combine job roles
- Cut down training hours
- Cut down advertising
- Renegotiate leases
- Limited time memberships
- Partnering
- Selling member lists
- Go to contracts and discount and sell contracts to third parties
- Cut external advertising and go to more internal
- Travel and entertainment
- Tax rates
- Accelerate payment of contracts
10. What is your 20 percent reduction plan?
11. Any additions for a 40 percent reduction?
12. Create a contingency plan to reduce costs quickly and dramatically if a crises or catastrophe were to hit.
Shawn Stewart is the Operations Manager at Gainesville Health and Fitness Center. Contact him at shawns@ghfc.com
