Episode 26 | Marc Freedman | Exposing Expenses For Extra Profits

GFEP 26 | Expense To Profit

 

This may sound overly simplified, but the bottom line to any business’s profitability is increasing revenues and decreasing expenses. Marc Freedman, the author of the bestseller Expense to Profit, helps companies identify those hidden costs in their business and reduce overall expenses to keep more of their revenues. In a way, he exhumes expenses to help clients get extraordinary profits. But Marc’s work isn’t always about finding cheaper vendors. It’s all about what brings the most revenue and the most value for the business. In this conversation with Rob Cornilles, Marc describes how his diverse team of industry experts finds the best solutions for different clients and how the consultancy makes money from that service. Do you think you have an expense in your business that you’re not too sure you’re getting the most of? Chances are you do, so listen in to this episode and learn how Marc and his team can help you.

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Watch the episode here:

Marc Freedman | Exposing Expenses For Extra Profits

Excuse this oversimplification but for your business to be profitable, two fundamentals have to be achieved. You have to increase revenues and decrease costs. For decades, I’ve been trusted to help organizations grow revenues through sales. My guest is at the other end of the spectrum. He’s helping companies everywhere reduce expenses so they can keep more of those revenues. I’m a big admirer of the work done by Marc Freedman, consultant and author of the bestseller Expense to Profit. As the forensic accountant for expenses, Marc and his team find the hidden costs that’s keeping companies from becoming wildly profitable.

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It’s my pleasure to welcome a friend and bestselling author, Marc Freedman, to the show. He is based in the Washington DC Metro market. I’m glad you’ve been willing and able to join us, Marc. Welcome to the show.

Rob, it’s great to be here. It’s exciting.

Before you and I met or before we became friends, I got to admit, I didn’t quite understand that your business or the type of work that you’re in even existed. Let me set this up for our readers. They all know that I’m in the business of producing revenues. That’s what I do with my clients and that’s what I assist them in. On the other hand, you’re on the opposite side of the ledger. You assist your clients in reducing expenses.

Talk about two opposite ends of the spectrum.

We bookend people. If people would hire both of us, we could cover all facets for them.

Think about how much success that business would have.

We’re making a good promotional team already. Marc, you are a certified Expense Reduction Consultant, a title I did not hear before you and I met. Describe for my readers what that means.

The expense reduction process is forensic accounting for expenses. There are specific methodologies and different strategies that you use when you look at how businesses spend money. As anything else, you can be a certified financial planner. There are all different kinds of certifications out there. I felt it’s important when I changed my business from being a business advisor to specializing in the expense side of the equation, which is where I always loved being to begin with when I helped businesses. I felt it was important that I learn the processes that we’re going to make the most amount of success for my clients when I was reducing their expenses.

GFEP 26 | Expense To Profit

Expense To Profit: Getting the information from the vendor is a source of truth.

 

You’re the Founder and CEO of Expense to Profit, the name of your business, which is also the name of your bestselling book. Before you launched the business, can you talk to us a little bit about your background and what you’ve done professionally?

Originally, my first two years in school were in Rochester at RIT, Rochester Institute of Technology. I was in accounting. I was going to become a CPA. I realized in my sophomore year when I came to the Washington, DC area with my roommates who were twins, “Why am I in Rochester? I got to move to Washington.” I went back, got applications, and I transferred to George Washington University. My goal was to be a tax lawyer to specialize in tax law. I then took curriculum for both businesses in accounting and law. When I got done, I was like, “I don’t like sitting behind a desk.” Now what? Another pivot. I spent four years in the finance world, helping people and businesses be more successful more or less from an operational standpoint. I don’t have the talents that you have on the revenue side. I did that for some clients but not successful.

Years ago, one of my good friends, who also happens to be on the revenue side of things that lives around the corner from me said, “Why don’t you concentrate on the expense side? You’re good at that. You ought to talk to this guy. His name is Phil Gross.” Phil belongs to a franchise group called Expense Reduction Analysts. I thought about joining them. There’s a fee upfront. A lot of dollars but not a big deal. What bothered me more than that was they were going to take $0.18 out of every dollar that I earned in fees. I was like, “That doesn’t sound right.” I said to Phil, “I’m going to get in this business. Do you mind if I hire you guys and some of your partners to help me out when I need specialists in those different categories? If I can’t make it on my own, maybe I’ll think about hooking up with you guys.” He’s like, “Sure, no problem.” That was it. Expense to Profit was formed and it’s been positive ever since.

You and I, when we’ve visited in the past about our respective businesses, I’ve joked with you about Expense to Profit. The cynic in me says, “If you’re an expense reduction expert, it sounds to me like you’re the Grim Reaper.” You come into an organization and you simply look at headcount and say, “We have to have a reduction enforce. I’ll reduce your expenses that way.” You’ve done a good job explaining to me that’s not exactly how it works. Can you clear that misconception for anyone who’s reading who may have the same idea?

One of the areas that we stay away from is belly buttons. We’re not worried about how many belly buttons you have or don’t have. We’re assuming that as a business, you know how many belly buttons you should have. You’ve probably had already gone through that exercise to make sure that you’ve right-sized your business from an employee standpoint. Our goal is to look at how you buy the things that you’re buying to use in your business, whether it’s a service-related thing or whether it’s a commodity-related thing, meaning wireless cell phones, telecom, data services, leased cars, logistics if your business is a high user of UPS, FedEx or one of those types of services.

We’re looking at how you are spending money and where you are getting them from. Eighty-nine percent of the time, we’re able to affect positive change from three aspects. It’s what we call our three-legged stool of our process. The first leg is quality of product. It must be equal or better than you’re currently getting. The second leg is the service levels. Are the service levels what you expect? If they’re not, we then help get those to the levels that you want. If they are, we make sure that they stay at those levels or excel to higher levels. The third piece is the price. Price is always last because if you can’t get what you want when you need it, what good is the price?

[bctt tweet=”Every business has hidden costs. They may not know it yet, but they all need help.” username=””]

When you engage with a client and they engage with you, who’s your primary contact? I presume at the outset, it would be some of the folks in the C-suite, the owner, CEO, CFO perhaps. Are you working more with the folks on the finance side of the office or on the operation side of the office? Help us understand what that looks like.

It depends. We like to start right at the top of the food chain. We want to talk to the business owner, the CEO, the chairman of the board, whoever is that’s going to drive this change that we’re going to bring to the organization. If that person says, “We’re doing this.” There’s no longer a conversation of, “I’ll get it to you in 30 days or 60 days.” A great story of that is four guys own a large mortgage company in our area. One of the guys, although his title is chairman, said to me, “I want to hire you. I’m going to hook you up with our CFO, Dave. Dave will contact you and he’ll get you what you need. We’ll see what you come up with.” I said, “If we don’t have a meeting together with Dave and you do a referral today by email, I will be calling you in 31 days to tell you that in the last 30 days, Dave hasn’t contacted me.” He’s like, “No, that’ll never happen.” Sure enough, 31 days later, I pick up the phone, “Mike, it’s Marc. I haven’t heard from Dave.” “I can’t believe that.”

Here’s even the funnier part of that story. A week later, in one of these networking events and it happens to be a lunch meeting, the guy who sits down next to me is the president of the mortgage company. It’s by happenstance. I look over and I’m like, “Craig.” He goes, “Do you know who I am?” I said, “Yeah, you’re one of the owners of the mortgage company.” He goes, “Have we met before?” I said, “No. I met your partner, Mike. I do expense reduction. He thought that it would be a good idea if we took a look at some stuff for you. He did an email introduction to Dave, your CFO, and I never heard from Dave.” An hour and a half after I returned from that meeting, Dave called me. Sometimes even when you’re in the C-suite, it depends on who in the C-suite has more leverage. Maybe they were embarrassed that Dave never called me. I don’t know which but there you have it.

You seem to have a lot of fortuitous meetings, Marc. If you’re having a hard time getting a hold of those people, maybe you need to take one of my courses in how to reach decision-makers.

I should sign up for that.

You work with the primary decision-makers. I have to assume, the actual nuts and bolts of the work cascade down throughout the organization. Is that fair?

That’s correct. After they make a decision, they want to move forward. We move down to the finance department. The CFO is too busy, so they’ll usually push us off to a finance person, which is fine. I need about five minutes of somebody’s time, it’s probably less than that but I always say five minutes because maybe they’re not as efficient as other people are. We need three things, an invoice, the contact information of the vendor, and then a contract if you have one. Those three things are where we start.

We always believe that getting the information from the vendor is a source of truth. As you’re probably aware, people put things in accounting systems when they buy things. Sometimes, they may get moved into different categories. When you do an export of a report, sometimes those things get lost. When we go to a vendor, they know exactly what they sold you in the last twelve months. Plus, we get it from them electronically and it’s a lot cleaner. We get UPC codes. When we do analysis, we take everything down to a unit piece. We need to know what everything costs by each unit.

What’s the reception of those vendors when you reach out to them? How do you represent yourself?

We have ownership call and they’ll say, “We’ve hired these guys. You’re going to be getting a call from Marc.” In addition to that, they’ll sign a letter of authorization and it’s addressed to each individual vendor. On their letter, it says, “We’ve hired these guys. They’re a partner of ours. They’re calling to get the information provided to them on a timely basis. By the way, they have no authority to change anything on our accounts.” That gives the business a comfort. As one of my government contractors has said, “You’re not going to do any hanky-panky with our business.” Of course not. We’re just getting information.

When you’re engaging with the vendor for your client 89% of the time, you’re not recommending or instigating any change in vendor relationship. You’re simply trying to find and improve relationship for both parties and cement that relationship for a longer-term.

Our goal is not to displace anybody. If you think about it from our standpoint, if you change a vendor and something goes wrong, who’s going to get blamed? Me, regardless of whether I had anything to do with it. If we hadn’t been involved, it would never happen. For us, price change, service level increases, and product quality increases are easy, especially if they’re happy with the vendor relationship. If they’re not happy with the vendor relationship, then we take a different attack. We’ll got to the market place and we’ll find somebody who may be able to solve the problem.

We’re doing that for a bunch of clinics down in Florida. They’ve got 22 different locations. Their lab provider is one of the major providers in the country. To them, because they only have 22 locations, they treat them as if they’re like a real small business and they’re not important to them. We’re going to the marketplace to replace them to find somebody who wants to be a partner that can solve the problems that they have. They’re sending almost 80,000 lab tests to this company every year and growing. You would think that would be important but not when you’re the size that you are of this large company.

Our goal there is to improve the relationship. In this case, the service levels are not great. They’re certainly not proactive, they’re reactive. They want somebody who’s going to be a partner, who’s going to help them grow their business, and be a partner with them and integrate with them. When they get reports, their reports are being faxed. The reports are coming in through their ER system, through their electronic medical record system. These are the things that we look to do process improvement for clients if we have to make a change for vendors.

Before I go further, Marc, describe your team that is a part of Expense to Profit. What does your team look like?

My team is extremely diverse and it’s made up of guys who have spent over twenty years in their discipline, their expense vertical. What does that mean? For instance, my guy who specializes in logistics spent 37 years at UPS, retired, and now he’s doing consulting in the logistics space. It doesn’t matter whether it’s UPS or FedEx. The man started as a porter, became a truck driver, moved into management, and when he left UPS, he was the chief designer of their pricing schedules. There are different tiers of how they gave people discounts. That’s the guy you want on your team.

My guy who does medical supplies spent his entire career with Cardinal Health. He was the chief pricing officer and then became the president of Cardinal Health, one of the largest medical supply companies in the country. He’s been doing expense reduction for the past twelve-plus years. These are the people that we bring to our team. We’ve got about 43 different categories that we look at Expense. I always say, there’s no category that’s safe from us.

[bctt tweet=”You don’t know what you don’t know. Get professional help to take a look at your expenses now.” username=””]

I almost thought that I was going to have to change that line when we were presented with an opportunity with a Boeing subcontractor. They stress-test airplane parts and I was like, “I don’t know anything about this. What am I going to do with stress-testing airplane parts?” We’re all independent contractors who all have our own company but we work on a hub and spoke system where I’m at the center. Anytime a client has an issue, they come directly to me. They don’t have to worry about who they’re going to talk to. I sent an email out, “Anybody knows anything about this?” One of my guys responded back, “I’ve got a PhD in that.” Not stress-testing airplane parts, but stress-tests. He had a PhD in stress-testing. That was funny.

I thought I was going to be stumped. No, not at all. As it turned out, it was even simple. It was a matter of taking a consumable. They bought sand that was used in the process that was non-hazardous. When they were done, they would dump it into a rubbish container that they would pay for it to be hauled away. They would have these great 55-gallon line drums that were in good condition, nice and clean with tops. Some guy would come and pick up 100 drums for them. He’d bring in a flat load truck. They would put 100 drums on the truck and take them away. That was a service he provided. He would be there three times a week and charge $500 a load. I’m like, “That doesn’t make sense. Both of these didn’t make sense.” They were charging you undermarket rates for taking stuff away. That said to me that there’s probably a revenue opportunity here.

We ended up turning the cost of hauling away the sand into a revenue source by recycling the sand. It probably ends up at Home Depot and Lowe’s because it’s fine sand, the sand that you would find in playgrounds for kids or something like that. These 55-gallon drums were being sold on the market for a minimum of $110 apiece. We said, “We’ll take 50% of that revenue.” We turned an expense of almost $1 million into a $750,000 revenue swing for this business. Everybody says, “Think outside the box.” I use the Albert Einstein approach. If you use the same methodology to get to a solution, trying to find an answer to that solution, you can’t use the same methodology. That’s our theory of how we go about solving problems for clients.

You’ve related to us a couple of different industries. The members of your team come from different disciplines. Is there a particular industry or market that’s your sweet spot? Despite your airplane example of Boeing as far as stress reduction, is there a particular industry that you’d want to stay away from if anyone called you on that?

I don’t know about staying away from any industry. We always try to help people, even if we realize we’re not a good fit. We say fit means finding impact together. If we realized that doesn’t work for us, a lot of times, we’ll have a conversation. I don’t mind having a 25-minute conversation with someone to realize that we can’t be helpful. I may find some solutions for them that will be helpful. It may not be helpful for us. Our biggest client is Fuji USA Holdings. They do over $2 trillion a year in revenue as a worldwide company. There are 23 different companies here in the United States. We work through the holding company, but then we work indirectly for 23 different companies finding solutions.

At one of the companies, we found $2.3 million in overpaid premiums for workman’s compensation. You would think that a company like that would probably have those issues buttoned up. It’s not so. However, when they gave us their temporary labor spend to review, which was $12 million a year, they had no idea if all the different companies were using those contracts, and if they were getting the right pricing. We found $12,000 in errors. We handed it back to them and said, “Here are the errors if you want to go collect them yourself or not. We’re okay with that.”

We also saved them $185,000 a month on their wireless phone bills. They have over 8,000 employees with a lot of devices. They were on the wrong plan. You don’t know what you’re going to uncover and what you’re going to find. We’re always doing different things for them. I’ve done a sales tax recovery on a manufacturing facility for energy spend that they shouldn’t be paying sales tax on. We’re doing for them. There are all these different categories and all these different businesses. A lot of people need help but they don’t know it.

When you engage with a client, are you spending a lot of time at their facility in their offices? Is this mostly done remotely?

We’ve always been a virtual company. For us, what happened with the pandemic didn’t change how we did business. We probably had an initial face-to-face meeting to go over everything at the beginning and sign a contract and what have you. After that, everything was pretty much done remotely except for them. When we come back with our results, we would then have another meeting to present our results, what our findings are, and what we think is the best process going forward. That’s changed a little bit. It saved them money because we don’t have to charge them for our travel. It saved us money because for those that we didn’t charge for travel, we’re not paying for the travel.

Our clients are all over the country. I’m talking to a large university in Kentucky. We have a medium-sized city in the state of Ohio that we’re working with that we found probably about $4.4 million that we’re savings for. For us, we’ll talk to anybody because everybody needs help. I don’t know if I can help them. There are five churches that came to us down in Missouri and we couldn’t help them. I said, “Why are you doing business with this refuge company and this refuge company? Why don’t you just do business with the local guys, get rid of the main brand name who’s charging you three times what these other guys are charging? Your two churches are around the corner from each other.” They never thought about that.

As we’re talking about the level of savings that you can find and create for your clients, a lot of my readers are probably wondering, “That sounds great. Is this going to cost me an arm and a leg? I need to reduce expenses, not increase expenses by hiring Marc and Expense to Profit.” Tell us how the fee structure works.

We call that our seven-layer win dip. First of all, there’s no risk to hire us. Our goal is to find savings. If we do find savings, then we share in the savings. For every $1 we save, you keep $0.50 and we keep $0.50. We manage that process for 24 months. Typically, we’ll do a 36-month contract with a vendor, whether it’s existing or no. It doesn’t matter to us. You get that flat price in the pricing that you know. We’re going to monitor that on a monthly basis because that’s how we get paid. We know that you bought this much from that vendor. We then provide you a report that shows you that.

If pricing doesn’t match the contract price that you were promised, we go to the vendor and we say, “Mr. vendor, you priced this wrong. You owe the client $125 credit,” whatever the dollar amount would be. There’s nothing that you have to worry about. We’re another layer in your finance department that’s catching errors even before you guys paid any bills. That’s how we manage it. That’s how we get paid. The impact piece that we have is 5% of the fee that we get paid, you as a business get to direct to either a nonprofit or some community event or some program that you want to sponsor to make yourself a better citizen. We’ll donate that in your name. Of course, you have the option as a business to match that too.

To me, that sounds like the business is getting 55% and you’re getting 45%.

No, because 5% is going to the nonprofit. We’re getting 45%. The business is getting 50%.

What I mean by that is they’re benefiting from you. They did that in their brand’s name.

That is correct.

That’s wonderful. As far as time consumption, if I were to hire you as opposed to an auditor, with all apologies to my accounting friends who are reading, you’re not going to come in and require a lot of my time, and I don’t need to clear hours and days aside to work with you. You can work independently of my current staff and operation.

Our total process is an eighteen-minute presentation to decide whether you want to move forward. I need five minutes of somebody’s time for each category we’re going to review. We’ll come back to you and we’ll make a presentation of what we found and present you with what we call our baseline report. Our baseline report shows you what you’re spending with the vendor, and what we believe the opportunity will be. That’s our measuring stick. You sign off on that.

Once you sign off on that, now we’re into, let’s say we’re doing two categories, that’s ten minutes, eighteen-minute presentation, and maybe there were a couple of questions, let’s say twenty minutes, now we got half an hour. We got to see the presentation and the sign off to move forward to another half hour. You’ve got an hour’s worth of time for us to potentially save you 18% of whatever it is that we’re looking at. If you think about it that way, isn’t worth an hour of your time, if we’re looking at $1 million to spend to save $180,000? I would suspect it probably is.

I don’t think it takes a mathematician like you to answer that question. I love that. Marc, you have been helpful to me and my business as well. You decided to make your expertise available on a broader scale by publishing your book, Expense to Profit, which became a bestseller quickly. I want my readers to be able to have access to that book. That’s one of the reasons why I wanted to have you on as a guest. While I try to assist them on the revenue side, I know you can assist them on the expense side that you’ve been eloquent about. Talk to us a little bit about your book. Who is it for? Is it for a small business owner? Is it for a major corporation? Who would be reading that? Who’s your primary audience?

In the book, I lay it out at the beginning that it’s for three different marketplaces. It’s for someone who’s at a $0 to $10 million business that’s trying to get up and running. Some guidelines or guiderails of things that you can do and shouldn’t do. It’s then for the business that’s already past that point, that’s trying to scale up to the next level between the $10 million and $100 million revenue point, and then for the $100 million-plus revenue point. I even have businesses that do over $1 trillion a year in revenue that we help. Size is not a problem on the upside.

For us, we try to concentrate on businesses that are larger, above $10 million, because it takes us as much time to do a $10 million audit as it does to do a $100 million audit. For us, it’s more economical to do larger size businesses. I’m happy to offer my services to anybody who has a question and I’m happy to spend a little time with them. Everybody needs help and I’m willing to do that as well. The special that we’ve got for your readers is we’re running $0.99 for the digital version. It would be the best $0.99 that you spend. If you want the paperback version, we’ve got that for $12.99 rather than $20. That’ll be offered to your readers.

GFEP 26 | Expense To Profit

Expense to Profit: Eliminate the Costs that Sabotage Your Growth

Thank you so much.

The great piece about the book is the first couple of chapters tell you about expense reduction, what it is, what we do, and how we do it. It’s not down to the brass tacks into a lot of different detail because you can’t put too much of that in a book. I also go through different examples of different clients in areas that we help them across different expense categories, and some of the most common expense categories about how we help them and who we help. Those are also good lessons for business people to look at to be able to understand that there are these opportunities.

Thank you for that. For my readers, all of that is available on Amazon, Expense to Profit. Let’s say I’ve never met you before. I want to tap into your wealth of experience. Is there a common philosophy, strategy, or tactic that you find that people who are spending too much in any one category share? There’s something that commonly we’re doing either incorrectly or naively, and it’s always an easy find for you.

Think of it this way, businesses that are large enough to have a CFO, what is the CFO doing on a daily basis? He’s running the business. He’s trying to find solutions but he can’t be an expert in every single different spend that a business has. You’ve got a lot to spend on your business. You got your whole telecommunications piece, wireless, wired, data. Now remote is a big piece. You’ve got your benefits, your health care, the insurances, and all the stuff that goes along with that. Each one of these categories has layers and layers of different things.

We found a solution for our clients to be able to get rid of their own regulated medical waste on-site rather than using a service to take it away. You’re going to eliminate the liability costs of having to file with the federal government. Everybody that has gone to a doctor’s office sees that red box on a wall, that’s a sharps box. When that box is full, they pull the whole box off. They don’t empty the box. The whole sharps box comes off. It must be regulated and removed by a proper waste system. We have a device that you can put that into. It sanitizes it at 137 degrees centigrade, grinds it, and you can put that in your regular waste stream. It’s crazy. It costs about 25% of what it used to cost to have it removed.

We’re finding solutions all the time. You don’t know what you don’t know. That’s the biggest problem. We’ve done over 25,000 audits and reviews for clients over the years. We found over $1 billion in savings. That tells you that we have some information that you’re not going to have. We know market prices. We have strategies that we use like reverse auctions. Think about eBay. If you go to buy something on eBay, it’s an auction. The price goes up because more people are bidding.

On a business standpoint, we’re trying to buy a whole pool of products and the price was going down as people were bidding versus auction. Once we get two bidders back at the end and we know they’re 1% apart, we know we found the market price. You wouldn’t ever have it if you didn’t use that process before. Most people don’t even know what it is. These are the strategies that we have in our toolbox that we use to help businesses be more successful. You don’t know what you don’t know is true. There are a lot of businesses that think they know. When we come in, they found out they didn’t know well.

As we wrap up here, there’s a question that’s stirring in my mind. I don’t know if I can articulate it properly. My business has always been a service provider. If we are scrutinized by those who are charged with cutting costs, my frustration may be that it’s difficult to judge qualitatively the value of our service versus a quantitative judgment perhaps of a commodity. Help me understand how would you guide someone who’s trying to decide in a qualitative sense, related particularly to service, that you’re paying too much for that service that’s not producing the ROI you need. Here’s another service provider that may be a little bit more expensive but the ROI is much greater. Is that a discussion that you have both internally and with your clients?

It’s a discussion we certainly can have. It’s not a discussion that we have often. However, when a client says, “Look at everything,” we see this big consulting fee, “What are you paying?” Let’s say that one of our municipalities hired Deloitte to consult with them on different processes. We already told them what to do. Our cost is $0, but they weren’t sure because they didn’t pay somebody for advice. Now they went out and hired Deloitte to tell them the same thing we already told them.

It’s hard to quantify. The bottom line is, is the value of the services you’re getting equivalent to the price that you’re paying for the ROI you expect? What’s the issue? How important is it to fix that issue? What will the impact be once that issue is repaired? Whether that’s on the revenue side or the expense side, that’s how we do a measuring stick and the same thing, what’s your return on investment? Are you better off paying 20% more for a service that gets you 100% better results or paying the lower cost service? That’s probably a pretty easy answer. We find in practice, as you’re aware, not many people subscribe to that. When governments bid, they call it lowest in best. You buy the best at the lowest. If I can buy the best at the lowest, isn’t that a better solution than lowest at best?

Marc, you know this is better than I do but I’ve often said that cheap is expensive.

100%, because if it’s cheaper, then you’re going to have to do cheap again and again.

Not to mention the morale that it could cost you, the goodwill that it can cost you among your exterior audience or your external customers. Cheap can be expensive. What I’m hearing you say is you may not come in and make the recommendation of the cheapest option. Your Expense to Profit is all about making the recommendation to get the most out of your money.

Not only the most out of your money but the best solution for the client. Even if we may find a better solution, it’s still the client’s choice to make that change. They may not want to make that change. We’ve had that plenty of times. We found a better solution and they say, “We like what we got.” We’ll reduce the price then. We’re happy to do that for you. It’s your call. You’re the client. Our job is to satisfy you, the client. We’ll make less when that happens. We’re willing to take that risk. That’s part of our business model.

[bctt tweet=”Buy the best at lowest, not the lowest at best.” username=””]

I like what I’m getting from you here, Marc. Every time I talk to you, I learn something more about my own business and how I can run it more efficiently. Give us a takeaway. How can we make today a little bit better because of something you can teach us? What’s your tip of the day for people to run more efficient, more cost-effective businesses?

I ask a business owner what is the check they hate writing the most every month? Most often, it seems to be healthcare-related expenses. My suggestion is if you’re using an insurance agent, that’s the wrong solution. You want to be using an insurance consultant or someone who can consult and review what are you offering your clients. Why do I say that? The government contractor that I’ve mentioned before about the hanky-panky, we looked at what they were doing on their health insurance. They have three different plans like most people do, an HMO, a middle tier, and then a high tier. Who’s in the high tier? The business owner, one person.

When we did the analytics, it was costing him $150,000 a year to offer that. Here’s your business improvement. Here’s your benefit for an employee. We took the HMO and left it alone. We took the middle tier and made that the top tier. We then took and created a new middle tier. Do you think the employees were ecstatic that they were now in the highest tier for their benefits? It costs nothing for them. When we removed that top tier, it saved the business $150,000 a year. It cost us about $18,000 to buy a special program for the business owner. It didn’t matter. It still nets $132,000 and the employees were ecstatic that they were on the best plan. We created a new tier. Some of them then move to the middle tier, saved more money for the business, which was a combination type of solution. There’s a lot of different things you can do. We’re not insurance agents. We can’t sell it. You have to have an agent sell it. We can find the solution that’s going to help bring everybody a better environment and a happier employee base.

GFEP 26 | Expense To Profit

Expense To Profit: A company’s CFO will never be an expert in every single spend that a business has.

 

This show is themed around our ability to influence, persuade, and inspire people. A lot of what you’ve said has influenced my thinking. It persuades me to think differently and to take action. I’m inspired in some areas. I hope my readers as well, and remind them to go out and get your book. Your eBook is available for $0.99 at Amazon. Your hardcopy, your paperback, you’re going to make it available to us at $12.99 also on Amazon. That’s Expense to Profit by Marc Freedman. I would encourage people to let Marc know that you’re a Game Face Execs reader, and you’ll treat them a little bit better, won’t you, Marc?

Absolutely. It would be my pleasure for you, Rob.

Thank you, Marc. I look forward to our next conversation, which will be soon, I’m sure. Thanks for all the great work you do and all the savings you bring businesses that need it most.

Thank you, Rob.

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If you run a business or department, which check are you writing every month that you hate the most? Are you confident, for example, that you’re not paying more than you have to on your phone plan? What about your health insurance, your daily operating expenses, transportation, waste management, the list goes on? Catch more of Marc’s expertise by joining us on YouTube, Spotify, Apple or whichever platform you prefer. Marc exhumes expenses to help us clients get extraordinary profits. Thanks for being a part of this episode. If you found any of it useful or helpful, please rate, like, and subscribe to our YouTube channel. I always appreciate you referring us to others as well. I’ll see you next episode. Until then, persuade, influence, inspire.

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About Marc Freedman

GFEP 26 | Expense To Profit

Marc Freedman is a Certified Expense Reduction Consultant and currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. He is a respected mentor to all he consults with. He is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.

As founder and CEO of Expense To Profit, he utilizes his 40 years of experience by efficiently implementing his comprehensive solutions to control client costs and focus on individual successes. With his guidance, over 89% of his clients have found no need to change their partners or vendors, enabling them to continue with their daily operations as usual. He would be thrilled to talk with you about how to improve your financial strategy.

International Association for Expense Reduction Consultants
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Virtual Coffee Series: Leaders Adapt to the New Normal
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