Thursday, November 20, 2014

Joe Geiger: Reducing costs - Business principles 101

Joe Geiger
By Joe Geiger 

The decision making process in business and our lives entails a systematic approach to problem solving. If properly done, it can make our lives happier and our businesses more profitable.

Is there any sure way that the bottom line profit can be improved? Yes, there is a way, but first you must define the problem and then set goals. The third step in the process is for the company to reduce their costs in every area that they can. That does not mean that you should see how cheaply you can do an activity; it means that you should examine your costs with a critical eye and ask yourself if there is a way to do a better job for less. 

During the Carter administration, I owned a California-based general aviation business. The oil embargo caused new airplane sales to collapse. Like most of our competitors, we had been running large weekly ads in the Los Angeles Times want-ad section. Suddenly, the ads weren’t working, but the costs of the ads were continuing. Mooney Aircraft, manufacturer of one of the airplane that we sold, made a line of very fast, fuel efficient, four-place airplanes. I decided to try a direct-mail sales campaign targeting large six-place single engine and light twin engine airplane owners. The sales pitch was that our fast, small four-place airplane would do the same job as the larger airplane 95 percent of the time as their larger-six place airplane, but at half to one-third the fuel cost.

Read more here:

No comments:

Post a Comment