22 Nov Reducing Expenses
When a new expenditure is needed, it is common for the business to devote considerable time and effort to researching the various alternatives, negotiating the best rate, and deciding on the best deal. After that, however, most are never evaluated again. With the competition in the marketplace, advances in technology, and new ways of doing business changing regularly, there is often a better, more cost effective alternative available in the future. Keeping aware of these kinds of changes can make a big difference in the bottom line and cash flow of the company.
An example to illustrate the point: A business owner had been using the same broker for 20 years. The broker was a high school buddy and the owner knew that the broker was providing the best deal he could on the business insurance policies. On the urging of a new controller, the business owner finally agreed to accept other quotes on the policies. What was discovered was that the business had grown so large, with so many employees, that the better deal was available by going direct with an insurance carrier rather than through the broker. The savings was approximately 25% of the total premium. The broker agreed that the best decision was to go with the insurance carrier and requested the opportunity to quote the policies the next year.