BENCHMARK YOUR COSTS
Jul 15, 2020 Florent Hainaut #Finance

The decision tree: a solution to manage all your small expenses

What do you do to optimize all the small expenses of a company, the ones you never take the time to look at? 🔍

 

 
In the second episode of the "Minute Cost-Killer", I recommended that you apply the Pareto rule to identify the cost items where you should invest your energy.
 
Today you are left with this mass of small expenses, small suppliers. This is called the Tail, the tail of your expenses. It's the 80% of suppliers that account for 20% of your expenses. 📉
 
 
My advice to you is to use a decision tree. You're going to have to go through each of these expenses very pragmatically in this decision tree. 💡
 
Among other things, you'll have to determine:
  • Is the expenditure necessary?
  • If not, does it have a low or high impact on my business?
  • If it is low, can I decide to simply eliminate this expense?
  • Or do I have alternatives?
  • Is the expense challengeable?
  • Can it be negotiated or massify?
IMPORTANT: I apply this method with companies but it can also be applied for your private finances 😉.
 
In the next episode, I'll tell you about the goose with the golden eggs, good advice for your human resources...
 
The Cost-Killer Minute in 7 episodes 🔥 :