| Expressing Costs in Revenue Terms |
|
We have always watched our costs extremely closely, but have become much more effective at controlling them since we started expressing costs saved in terms of top line revenues.
For example: In a business where each dollar of revenue represents a gross margin of 25% then each $100 of expenses eliminated translates into $400 of revenue you would otherwise need to achieve the same result. Go one step further and look at the underlying activity needed to create revenue (in our case patient visits) and the dollar savings start to have real impact. When you communicate the impact of savings in this way people really start to see the business in a new light….and it is wonderful to see expense reductions fall through the P&L all the way to the bottom line. John Dugan, President, Farmingdale Physical Therapy, Farmingdale, NY http://www.farmingdalept.com/ As published in Tips from the Top®. Copyright by TAB Boards International, Inc.For more information, please visit www.TheAlternativeBoard.com
|
| < Prev | Next > |
|---|
