Featured Coaching Training: How to Manage Your Expenses: 8 Principles for Cutting Waste
Expense management is something that not many businesses have mastered quite yet. If you're new to money management, this can be an opportunity to challenge your business to be disciplined with its finances. Here are 8 basic principles for keeping your spending under control and cut wasteful spending.
Featured Coaching Excerpt - Notes & Transcript, Part 1
Lesson Nugget: PRINCIPLE 8: Create A Culture of Cost Watching.
Lesson Nugget: Give your employees a 10% bonus based on the money they save your company.
Recommended Reading: -by Kevin & Jackie Freiberg
- ♫ Break it down, down, down
- Principle number eight: create a culture of cost watching. Clay, we're talking to those that are watching on Thrivers on how to manage your expense. Eight principles for cutting waste. This is our last principle so tell us a little bit about what you mean by "creating a culture of cost watching." Is that like bird watching or something?
- Well, here's the deal. Give every member of your team a bonus. I'm asking you Thrivers to do this, this is huge. Give every member of your team a 10% bonus. Based on the money they save your company.
- [Host] Awesome.
- Period. And if that's not enough, do 50%. But say, "Hey, if the printer costs us XYZ, "every dollar you save us, I'll give you 50%. "Hey, the cost of the advertising is ABC. "For every dollar you save, I'll give you 50%." But set up a situation where your team is incentivized to save you money. The best example I can give you. There's a book called "Nuts" written by, it's about Southwest Airlines, wanna make sure we put it on the screen there.
- [Host] Sure.
- It's called "Nuts" And what they did is, it's a case study of Southwest Airlines. What they found is, they set up a culture where at Southwest Airlines, you make money based on the money you save. Remember, Southwest Airlines is flying thousands and thousands of flights everyday. A flight from Tulsa to Dallas, from Dallas to Atlanta, from Atlanta to... It's just endless flights. 737's, Bowing 737's all day. So they're going, "Hey look, we're having no problem "booking up the flight, "but we need to make some money here." So they set up a culture of saving money, and they said, what is it? For every dollar you can save us, we will reward you in some capacity. And they've, literally, at Southwest Airlines had people make hundreds of thousands of dollars. Who were stewardesses, flight attendants, pilots. It's the result of the money they've helped the company save. So you wanna set up a culture where your employees are running around trying to save money. And based off of the money they've saved, they make a percentage of the savings. That's how you do it.