Beer Wholesalers: Use This Cost-Cutting Framework to Maximize Profits
According to business cost studies, and my own experience working with beer businesses, the largest expenses tend to be found in labor, rent, utilities, cost of goods, marketing and advertising.
We know these are the biggest expenses, but it can be hard to consistently review, scrutinize and cut these costs.
So, we need a framework to help out.
Below is a cost cutting framework you can use in your beer business.
The goal is to identify your biggest cost categories, prioritize them based on size, and implement initiatives to start making cuts.
Largest categories of expense for Beer Wholesalers:
- Labor Costs
- Rent and Utilities
- Cost of Goods Sold
- Vehicles and Equipment
- Marketing and Advertising
Test this out in your business by running your income statement and sorting expenses high to low.
Each of these categories have sub-categories of expense. For example:
- Labor Costs
- Wages
- Payroll taxes
- Health and benefits
- Employee reimbursements (mileage, cell phone, etc.)
- Rent and Utilities
- Base rent
- CAM charges (property taxes, maintenance, etc.)
- Repairs and maintenance
- Heating and cooling
- Lighting and power
- Cost of Goods Sold
- FOB costs
- Freight
- Carrying costs
- Inventory shrinkage
- Vehicles and Equipment
- Lease fixed rates
- Lease variable rates
- Repairs and maintenance
- Marketing and Advertising
- Cents per case spending
- Point of sale
- Promotional events
- Samplings
Each of these sub-categories of expense can be assigned an initiative or cost-reduction strategy.
This is where the real magic happens. For each category and sub-category, identify specific steps you can take to eliminate or reduce expenses.
Do this next:
- Watch the short video: Cost-Cutting Framework
- Join the network of beer wholesaler owners and managers working together to cut costs and drive profitability
