Maximize Profits: Essential Cost Management Strategies for Beer Wholesalers
The most effective cost management strategy begins with a zero-based budgeting mindset.
Instead of basing the new budget on the prior year budget, zero-based budgeting requires you to justify every expense for the new year from scratch.
In a previous post, we covered “cost creep”. The phenomenon that occurs when small, incremental expenses accumulate, going unnoticed, until they are a huge OPEX burden.
In your beer business, these creeping costs are everywhere.
I love this line from Double Your Profits by Bob Fifer. “Don’t assume anything has to be done the way it is. Instead, always ask the question, ‘if I eliminated this cost, would I really lose revenue or profits? How and where?”
In other words, as Fifer says, “every cost is up for grabs.”
Carlos Brito, of Anheuser-Busch implored beer businesses to scrutinize any cost that did not add value to the customer.
Said differently, if the cost was eliminated, would the customer even notice? Many times, they won’t.
In order to manage costs, start by managing the right costs. Cut expenses that don’t add value to the customer or contribute to revenue or profits.
Do this next:
- Get your copy of Double Your Profits in Six Months or Less by Bob Fifer, and start cutting wasteful spending.
- Join the network of beer wholesaler owners and managers working together to share ideas and best practices to eliminate un-necessary expenses
