Gurmeet Judge
Encompass solutions founder and CEO Gurmeet Judge interview successful business leaders as he dives deeps into the world of business to help people like you become successful business leaders!
Gurmeet Judge
Cost Control Strategies That Actually Increase Profit
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Controlling costs is as vital as growing revenue for scaling a business. Strong bottom-line management boosts profitability, frees cash for reinvestment, reduces risk, and builds resilience. Sustainable growth demands both top-line expansion and efficient expense control—without it, revenue gains erode, limiting true scalability and long-term success.
In this episode, I speak with Marc Friedman, CEO of Expense to Profit, a cost-control expert whose firm benchmarks 40+ spend categories, negotiates with your existing vendors, and delivers an average 18% savings—contributing to over $1B in documented client savings. He is also an author of besting selling Profit with Purpose and Expense to Profit . Mark helps companies cut costs without changing vendors by benchmarking spend, negotiating market pricing, and fixing “leaky buckets” like zip code pricing.
https://expensetoprofit.com/
Chapters
00:00 Introduction to Cost Control Strategies
02:49 Understanding Market Pricing and Vendor Relationships
06:04 The Importance of Written Agreements
09:02 Challenges Businesses Face in Cost Management
12:07 The Impact of Zip Code Pricing
14:58 Identifying and Addressing Leaky Buckets
18:08 Leveraging Technology for Cost Efficiency
22:09 Transitioning to the Google Universe
25:18 The Journey to Expense Management
31:48 Identifying Cost Control Opportunities
37:48 Final Thoughts on Business Efficiency
Introduction to Cost Control Strategies
SPEAKER_00I guess welcome to Business Leadership Podcast. Today our guest is Mark Freedom, uh Friedman. Mark, that area of your expertise. You know, this is the area where the when the economy gets tough and the economy is not tough. You always want to control your cost and your expertise in this area. And I'm looking forward to a discussion, looking forward to learning from you. Thank you so much for time today.
SPEAKER_02Yeah, thanks for inviting me. Uh, this is gonna be exciting.
SPEAKER_00Okay, welcome. So, you know, walk us through what do you do, Mark, and and uh your your your you know, what do your company stand for? What problem are we trying to solve in the market?
SPEAKER_02So the problem we try to solve is as you're aware, you know, businesses pay more than they should. They don't think they pay more than they should, but I can assure you, when we get involved, we find that they 99% of the time pay more than they should. On average, we're able to find a little north of 18% savings for client when they when they sign on with our services. But most importantly, it's true savings. If we don't find savings, we don't give them an invoice. And we measure savings on a month-to-month basis. So it is actually something that they do receive. During the pandemic, vendors, providers of services, or whatever you want to call these people, they all raise prices, not because they needed to, but because they could. And so right now, there's many businesses that are challenged to grow because they don't have the extra cash flow because the businesses have not only raised prices back a few years ago, but they continue to raise prices. And so our goal is to not necessarily change your existing vendors. A lot of businesses like who they work with. We would rather they stay with who they work with if they're happy with those people, but we just want to get them back to market price. So, what is market price? We're always asked. I always say it's when you get a couple vendors in the room and they're bidding for your business and they're 1% apart, you know you found market price. And that's what our goal is. That's how we do it, that's how we have fun every day, and that's how we help businesses be more successful. Mm-hmm.
SPEAKER_00And and that's the name of your book as well, Expense to Profit, I guess, right? So you know that's what the name came from a business.
SPEAKER_02Yeah.
SPEAKER_00So just so audience know that we're listeners were if they're watching us, you know, they know that we're not looking, you know, your goal is not to change the vendors, the goal is not to uh disrupt what's what's uh ecosystem is goals to just finding that efficiencies or finding that cost saving and and bring that to the table and and uh move business forward. Is that what the goal is, Mark? So there's 100%.
Understanding Market Pricing and Vendor Relationships
SPEAKER_02Yeah, I mean, efficiencies are all about. We have one client right now that we're working with that has three different logistics partners. Between three partners, they spend a million dollars. Okay, we have access to pricing that they don't have access to, and because of that, we're gonna save them 30% on their logistics spend or roughly$300,000. Why? Because I've got solutions that they're not currently using, and we have access to pricing that they don't. A lot of times the same thing goes on in the wireless world. You know, we've got one client out on the West Coast that has three different vendors. They have ATT, they have Verizon, and they have T-Mobile. Why? Because depending on where they are, different solution providers actually work better and they need to be in contact with their field staff. We need to change vendors. We found them competitive pricing and keeping them at Verizon ATT and at um you know at what's called mobile. And I say to them, you know, they were like, Well, we're gonna take this back to our business people. I said, they're gonna tell you five words. That pricing does not exist. Why? Well, it doesn't exist internally for them, but because we have access to other pricing models, it exists for us and for clients that we bring to those pricing models. So our goal is not to change 92% of the time, our clients stay with existing vendors. The only time they may change is maybe they're not happy with the vendor, and then we have to change. Or maybe there's a new vendor that is so much more aggressive in their pricing why they don't have the business. But we also have a three-year contract with that vendor, so the pricing doesn't go out of get out of whack and back to where they were paying before. So the, you know, you have the constant savings. But that's that's what we do for our companies.
SPEAKER_00So, what happened to the value added items in uh in a contract? You know, um a lot of service providers they add a bunch of values in it. The cost may not be, you know, as a competitor, but they add a lot of value items. What happened to those value items? Uh, if you if you compete on a cost, uh, does that do they lose the sum of us? Why?
SPEAKER_02Why would they lose us?
SPEAKER_00So I'm just simply saying that for the for them to business win a business, they probably just add a bunch of value-added items, right? So, you know, even though the prices may not be competitive, you know, a little bit higher, but they have tons of value in it.
The Importance of Written Agreements
SPEAKER_02Uh well, you may not be going to play golf with your sales rep anymore because he got his pay cut. But I'm sure with the money that you're saving, you can probably pay for your own round of golf. No, I mean, it's it it's very interesting because we don't we don't depreciate the value of relationship. Matter of fact, a lot of times we increase the value of the relationship. And a lot of times, you know, people are on what's called the cost plus model. So we were working for this one very large dental practice out in the Midwest, and they said they were on cost plus 15%. So we got involved, we did our analytics, and when we renegotiated pricing, they were now cost minus 3%. We saved them 18%. The CFO didn't think that was so funny. But the CEO, he was laughing. We presented, I said, So, you know, Paul, you know, cost minus 3%. The problem is a lot of times people don't have what is cost written into their agreements. A lot of times they don't even have an agreement. Our goal is to get everything in writing. It's black and white. Here's what cost is. Don't try and add other things in that weren't part of the conversation, you know, someday up the road. It's not the way we do it for our clients. We make sure that everything is is buttoned up pretty tight. So you have an agreement, here's what it is, here's what they can do, here's what cost is. If you're on a cost plus model, you get all those things defined. So if something changes, you can go back and say, well, what happened? You know, and and so because our goal is is to get the client the best product, the best service for the best possible price, it may not be the least price, you know, because a lot of times if somebody doesn't have a bit heavy business, what are they gonna do? They're gonna bid very aggressively, right? Yeah. You know, maybe it's only one or two percent difference. It could be a lot of money if you're, you know, millions of dollars in contracts. But then again, you you know, the the client has the decision whether or not they want to make a switch or not. And like I said before, 92% of the time they stay where they're at. And a lot of times we can get the existing vendor to maybe disherpen the pencil just a little bit more so the differentiation is even narrower.
SPEAKER_00Got it. Does that work the same for product or certain and services, or is it a more this is more for you know buying product than not a services about it?
SPEAKER_02Product services doesn't make a difference.
SPEAKER_00Okay.
SPEAKER_02You know, everybody has, you know, okay, here's what our costs are, here's what our profit margins are. Well, is your profit margin this big or does it need to be this big? And and so, you know, what what we're just trying to do once again, everybody has to make a living, everybody has to support their family. Well, but the business has to grow too. And if the business can't grow, it's not going to be around.
SPEAKER_00Yeah, so what's the exactly you can get the best price, but if the business is not around, then what you do?
SPEAKER_02Right. So, you know, it's it's it's a it's a balancing act. And and then our give back for for our clients, we take five percent of this of the fees that we get paid because we don't do a lot of marketing because we have a lot of relationships with referral partners. So instead of marketing, we take 5% that could go to traditional marketing, so to speak, and we create what we call an impact fund. A client gets a direct 4% of that money to give it to a charity or a cause that they want to support or a cause that they do support. The other 1% goes to 1% for the planet. And so then we take that money and we usually try and find a cause that's relatively close to where the client is.
Challenges Businesses Face in Cost Management
SPEAKER_00Very nice, very good. Yeah, so you give it back. Interesting. Why can't businesses not able to do this, Mark, without you? You know, they did their I understand the goals are different. They have a different lenses they're looking at. So, what is some of the challenges they they they get hit with if they when they try to do uh similar?
SPEAKER_02You know, it it's it's a very interesting, that's a great question, honestly. And and uh, and the biggest reason is because you are talking to these clients all to these vendors all the time, right? You have a relationship. You're not necessarily, maybe you're not aggressive, or you feel compelled to just accept whatever they tell you. I don't care. I'm not I'm not gonna accept what they tell me. I'm gonna compare that to our database of all the other clients that we've helped in that category that we're working on to make sure that we get you the most competitive pricing with the best products, with the best service levels, so that everybody wins. Now, you may, you know, maybe we're looking shooting for 25%, but we feel, okay, well, we're not going to push the 25% because that would really kill the vendor. We'll go for 18% because we know that's achievable. And they'll probably start at like 13 or 12 or 14 or 15%. And then you have, you know, it's a negotiation, right? That's what my life is. I'm a professional negotiator.
SPEAKER_00Got it, got it. So I know in large companies, it's easy to probably spot those opportunities because you know it's a big contract. There's a little bit, even a little bit, you know, cost control is a big, big, big, big numbers for them, right? Does that work the same for mid-sized company or smaller business? Like is how hard is it to find those opportunities in the smaller businesses or mid-sized businesses?
SPEAKER_02So, you know, it it really depends on the business because we work with businesses that are 10 million in revenue, and we've got businesses that we work with that are two billion in revenue. And the the the the two billion, you're gonna find bigger spends. Yeah. So you're gonna find more, you know, bigger savings. Why? On a percentage basis, it may not be as big as the$10 million one. I mean, but it just it really it really boils down to uh sometimes it's just knowledge, it's data, right? Everything today is data, everybody's comparing data. Okay, so we have an AI software that can compare data from all the different projects that we've you know we've been involved in and our partners have been involved in, and then we can compare to where are things today and where should they be today versus what you're paying. And then we use that to our advantage.
SPEAKER_00Nice, nice, interesting. So, yeah, no, definitely, I think the the bigger the company is, the bigger the number you're gonna, even though a small ratio, but the bigger numbers you're gonna get, but the smaller, you know, it's e even though same same kind of saving, but it's just gonna be smaller number. But that smaller number may be small too compared to the big company, but the small number is much bigger item for for the business owners themselves, right?
The Impact of Zip Code Pricing
SPEAKER_02Absolutely, absolutely more meaningful to the smaller business. And oh, by the way, a lot of times, now here's the crazy part. Listen, this is very same vendor, multiple offices. This is a medical practice, multiple office, identical product, was charging one price in this zip code and a different price in that zip code. Why? Well, the pricing was based on the higher average earnings in a zip code. Oh, okay. So they charged higher prices in the higher average earnings zip code. And I'm like, that's insane. It's the same business.
SPEAKER_00Are you allowed to do that? Are you allowed to based on a zip code?
SPEAKER_02I'm just telling you what some business is doing. Okay. So, you know, it it I mean that that's actually the that that's actually very similar to when I had my kids. Okay. This is the this is how the insurance companies work. When my wife went to one office, they had priced it the the the the the fee for the doctor for the you know the whole practice, the whole nine months plus delivery, was priced here. But then when she started going to a different office that was again in a different zip code, they changed the benefit to here. And all of a sudden I'm looking at our copay that went from like we'll say a hundred bucks to a thousand dollars. I'm like, what's a big difference? Call the insurance company. Well, that's because she's going to this office and this office we paid this, and this office we pay that. Say, what? This is where a doctor is. She goes to wherever it is. I mean, that was insane. That was the first time I learned, and this is I'm talking now. I mean, all right. My son is 36. Okay, so talking about this is like a long time ago. That's the first time I learned about zip code pricing. Yeah.
SPEAKER_00Very interesting. In your book, I was just going through your book, a lot of great examples. You know, the book is full of tons of tons of great examples. One of the items that that got my attention, I wanted to talk to you about leaky buckets. You mentioned the concept of a leaky bucket. What do you mean by that? You know, what how do you how do you define it? How do you how do you identify?
SPEAKER_02So a leaky bucket is is kind of like if you think about you're doing business with a vendor, and and and you know, I've got obviously plenty of examples. And this, you know, every month they're like raising prices by three-tenths of a percent or a half of a percent. Okay. And now you've been with this vendor, and three years later, all of a sudden you're paying 100% more for the same product that you were paying three years before. But your accounting staff is not picking it up. Why are they not picking it up? Because it's within the band that they'll allow for pricing differentials. That's a leaky bucket.
Identifying and Addressing Leaky Buckets
SPEAKER_00Has nothing to do with inflation, has nothing to do with any of that stuff. It's just because they have a uh number two. Okay, got it.
SPEAKER_02Most businesses, if they see something that's within the normal realm and what's the normal realm, every business is different. But typically it's it's anywhere less than 3%, but some businesses less than 1%. And so different vendors know where they can take advantage. And all of a sudden, you're buying the same product, and three years later, it's 100% higher. Why? Because you know, every month they've been juicing the price because nobody's paying attention. Not because they don't want to pay attention, it's just because that's just what businesses do sometimes.
SPEAKER_00And it's not specifying the contract or agreement, whatever that it's going to be incremental or increasing, they just simply do it uh just through the invoicing.
SPEAKER_02What you most clients do not have a contract that states what a business can or cannot charge. Interesting. Most businesses do not. Now, if they're a huge business, there's probably some kind of agreement. Most smaller businesses they don't they just you know, they they don't know to ask. They don't know or it's not often. Yeah because there's not enough volume.
SPEAKER_00Yeah, it could be the space that, you know, my space, nobody does business without it, you know. But I'm I understand the other spaces that could be whether it's lawyer, whether it's uh a doctor's office, you know, over any of their services, maybe they, you know, I I totally agree that they'll probably just go and just use the services instead of having agreement.
SPEAKER_02Yeah, uh in most cases. Now, I mean, what would people always have an agreement on? Rent, right? There's always a lease, right? A business lease. So that's usually the case. Same thing with insurances. Insurances typically, but insurances will typically raise rates, not once again, because they have to, but because they can. And most businesses will accept those raises. Yeah, why? Because they just think it's a cost of doing business. Oh, well, things are more expensive. Oh, well, that's they we need to pay a higher premium. Oh, we get more business. Oh, there should be a higher premium. No, not necessarily. Gotta bid things out competitively.
SPEAKER_00Yeah, yeah. Very interesting. And then you always talk about the next of the chapter, you talk about the technology as well. You know, use technology to increase, I think, efficiency or productivity, I think you were talking about. How does that relate to this controlling cost or cutting uh cost uh mark? How does that come into play?
Leveraging Technology for Cost Efficiency
SPEAKER_02So, you know, it's interesting because you know, we obviously use software, we obviously have technology that we buy. And and I can remember back in the 90s, the early 90s, we would buy a server. What can I get for$5,000? Right? Today, you can buy a server for less than$1,000. And it's 30 times more powerful than the one you bought in 1992. Okay? So, you know, so technology advances take advantage of them. AI right now, everybody's talking about about AI. Should I include AI? Should I? Well, let me tell you something. If you're not on the AI bandwagon, you better get on it. Because to be a successful business today, you need to learn how to incorporate AI into your business for the processes and the technology that you're using. But that doesn't mean, you know, have three licenses for different, you know, for you know, Claude and Chat GPT and Gemini. Figure out which one works best. Yeah. But then again, uh honestly, for real, I mean, like I use Gemini and I use chat G, I don't use ChatGPT, I use Claude because Claude writes better than the others. Gemini is just convenient because it's inside. We use Google, you know, we use the Google solution for our business, and it's built inside of it. So it's like, okay, well, that's easy. So now I just, you know, and Gemini, according to uh Benny off at Salesforce, he says, I'll never go back to Chat GPT. So, you know, there's a guy who, man, this is a pretty big business who is very comfortable with it. So, I mean, you know, things are evolving. And, you know, look ourselves. I mean, we use the software, we're HIPAA compliant because we deal with medical in the medical space, and we had a solution that we were literally paying a thousand dollars for when we first started working them to make us HIPAA compliant. It's a you know, a service that you buy. Well, last summer they wanted$2,500. Same service, same number of people. Yeah, okay. I was like, can you tell me what you're doing different today than you were doing five years ago? Well, the software and the interface and the this and that. I said, uh it's all the same. I mean, okay, it looks nicer. I can get a quicker answers, great. But one and a half times more? So here's the crazy part. This is how competitive business is some days, right? Now we hadn't decided where we were moving to yet. We were researching. They sent me an email that wanted a survey about why we're going to not renew it. Okay, I'll fill it out. It was basically price, it was not anything else. Did you subscribe with any one of these people? They listed eight different businesses that were all competitors. I was like, wow, you just saved me an hour's worth of research. I now know who I gotta look at to see who we're gonna hire.
SPEAKER_01Yeah.
SPEAKER_02Okay, not so smart. So I would recommend all businesses if you know, if you get, I mean, you know, don't send out a survey to someone who is not left yet as a client. It's good to send out later or have a conversation before, but you don't put in the survey who the competitors are. Yeah. Just say, look, oh, we found one. Oh, by the way, guess how much they are a year? Half for the same thing.
SPEAKER_00You just have to make eight phone calls instead of uh looking, looking at the colour.
SPEAKER_02I didn't even have to make eight phone calls. Okay, didn't even have to make eight phone calls. All I had to do is plug in their different websites. Oh no, that one definitely not. No, no, no, no. I mean, settled on three of the eight, did further research, settled on two of the eight, did further research. I mean, the whole process was maybe three hours total instead of like days. I mean, because you know, you get, look, I run a business, I can't spend all my time trying to figure that out. But so we do it for ourselves, you know, like right now, okay, we have Microsoft licenses. Okay. Uh why? We don't use we have our enterprise license, we don't use SharePoint anymore, we don't use Outlook anymore. We're totally in the Google universe.
SPEAKER_00So why do you have those, yeah, licenses with that?
Transitioning to the Google Universe
SPEAKER_02So why do I have those licenses? Well, because you know, you're kind of stuck, you're stuck on, so we're not Two licenses from as many as we used to have. Because it's you know, kind of okay, well, I've been using it for 30 years. I mean, what am I gonna do? Not use it. It's kind of like, yeah, but you know, and it's not a lot of money, but it's money. And and and and so we do for ourselves the same thing we do for our clients. We look at usage, you know, what are we using? What are we are we is there a better solution? Are we, you know, should we be changing from this to that? Yeah, and so we just try to make ourselves more efficient. We have our own AI software that's built into our app that we have for clients so they can see where they stand.
SPEAKER_00Interesting. Yeah, you know, that that that area where extra license extra software, that's a big part, you know, bigger the corporation because nobody's paying attention. And and when you try to negotiate, a vendor's gonna tell you, hey, you locked in for three years, you locked in for five years, let's let's talk when the five years are over, even though you're not using it, you're still paying for that that you know all that big ticket item for a lot of five. I see a lot of companies, that's that's a much bigger wastage of money simply because you locked in on something.
SPEAKER_02Yeah, that's why recently you've probably seen a lot of price depreciation in the market for all these different software companies. Yeah, yeah. They've all been going south because people are realizing okay, what are you doing for me that makes my life better that I can't do using a different solution, it's less expensive.
unknownYeah.
SPEAKER_02Okay, it's you know, we're gonna have to make a change. But sometimes you get locked into these systems, right? And it like becomes too expensive to change. So then it's a matter of negotiations. Okay, well, we have all these licenses. Oh, how many of the licenses are actually being used? Yeah, yeah. Got a hundred licenses, are they all being used? I have, you know. Uh no, there's only 82 of them being used. Okay, we'll cancel 18 of them. Okay. Well, we'll do that when your contract is. No, no, cancel them today. Give me a credit back, otherwise, we're just gonna terminate a whole relationship because of the service that's not being provided. And you'd be surprised. All of a sudden, they they will make those credits. They won't give you your money back, but they'll give you a credit.
SPEAKER_00Yeah, yeah. You know, being uh as of a background software developer, I have a sweet spot for software developers. I know how much time and effort it takes to develop a software and get it out of the market. So it's it's a lot of hard work. But yeah, I get the point that what we simply try to say is listen, use uh charge fairly, just just don't waste money. You know, that's what we're talking about. But I yeah, but it takes a lot of time and effort for them to get that out of the market. And but definitely it's a I think software solution itself is is a very lucrative business that once you build it, you can you can multiply so many times. You can sell it to the so many people.
SPEAKER_02How how much more does it cost to add more users? Incremental compared to the original development cost. I understand how it works.
SPEAKER_00Um interesting. So let's talk about your journey. Mark, how did you get uh involved in uh it in this controlling this cost? You know, how you you know, if you talk about your journey, how do you get so good at this and and uh decided to write a book about it?
The Journey to Expense Management
SPEAKER_02So I originally went to school for accounting in business. In my sophomore year, I decided that I wasn't going to be an accountant. So then I did politics and law. Decided I wasn't going into politics because it wasn't didn't pay very well and it didn't seem to be the right place for me. Um and I really didn't really have much interest in sitting behind a desk being a lawyer every day. So now I took my education and I became a business consultant. And what did I do? So I went into businesses. I had, I I can read, you know, I can obviously read financials, um, I can read contracts, um, I know what to look for. And so we had a consulting practice. We were a lot less expensive than a lot of the big names out there. Why? Because we were a small business and we could afford to be less expensive. But you're limited because if you're if you're working so many hours and you're charging for so many hours a week to a client, how many clients can you have? Right? So you have in in 2011, one of my very close friends, who I also consider to be somewhat of a mentor, he said to me, Why don't you just because I bring him in to do the revenue stuff and I would be doing the expense stuff. He says, Why don't you just concentrate on expenses? Leave the revenue stuff to people like me and other people who do the revenue stuff. I said, hmm. So he tells me I should talk to this one guy. Okay. We're at an event. He and I were both at an event in a group that we belong to, and the guy's there. He says, Oh, by the way, there he is. You should go talk to him. By the time I start looking for him, you know, a few minutes later, he's gone. Okay.
SPEAKER_01All right.
SPEAKER_02So I'm at a different event a week later, and talking to somebody, and he says, Hey, what's going on? What are you doing with your business? So I start telling me, I'm thinking about doing this, right? Changing from a front consultant to success, a success-based model. Oh, you ought to talk to this guy's name, was uh his name was Philip. You ought to talk to Philip.
SPEAKER_01Okay.
SPEAKER_02Now on the eastern shore of Maryland, we're at the beach. My wife and I are walking. We run into a customer of hers. She used to do business stationery and stuff like that. And so we're talking, and we have the same conversation, what's going on? Oh, you ought to talk to Phil. Okay. Three times within a very short period of time, Phil and I had coffee on Tuesday. And then I was introduced to his business, which was success-based expense reduction. And, you know, when I found out what they charged because it was a franchise model, it was like 18% of every dollar comes in, goes to franchise fees and marketing expenses. And I was like, that seems to be a lot. I mean, most franchise fees and marketing expenses are under 10%. Anyhow, so I said to Phil, I said, look, you know, I'm gonna try, I've got a lot of connections of my own. I'm gonna try and do this myself. If I can't, if I'm not successful, you know, maybe I'll come and join you and buy a franchise and we'll, you know, we'll we'll go ahead from there. So I ended up starting Expense to Profit. Matter of fact, my buddy who suggested I do this, my mentor, he's the one who came up with the name. And because that's what he's good at. He's really good at that stuff. And yeah, and here we are, it's 2026, it's 14 years later, and you know, we do pretty well.
SPEAKER_00So the the the business name came first, and the name of the book. So how how long? So the book came after?
SPEAKER_02Yeah, yeah. So by the way, I try to write that book at least six times. Okay, and I threw the manuscript away each time. I didn't just didn't like it. Finally, I hired somebody to interview me, and that's where the book got written. So I had a writer, the guy was a writer that I hired who organizes books. So I hired him and he interviewed me. Those the words in the book are real life examples from our clients. We don't name clients because a lot of our clients don't, you know, they prefer that people not know that they were very efficient. So there's no names in the book, but but that said, those are real life examples of how we helped a business get over a certain issue that they were having on the expense side. And so, yeah, so I was like, well, you know, just name the book, the name of the business. I mean, expense to profit. What take your expense, make them with profits.
SPEAKER_00Yeah, makes sense in the name of the book and then the business matches, right? So yeah, so there you have it. The second boost, was that before expense to profit, or was that that came afterwards? The second book?
SPEAKER_02Yeah, that came afterwards. So started a second business five years ago with a couple other guys, and we did we did some really good stuff together.
SPEAKER_00So, what that business is about, if you don't mind sharing. What's that? What that business is about, is that as related to this business as totally identical?
SPEAKER_02Two parallel businesses. I'm running at the same time with two different names. Okay, so one business is 100% mine, one business I had two partners in. But but my one business was doing all the fulfillment for the other business.
SPEAKER_01Got it, go.
SPEAKER_02Yeah, it was yeah. Anyhow, so yeah, so you know, we we ran that business for five years, and after five years, it really didn't seem logical to have two separate businesses, and these two guys were not involved anymore. And so I basically merged the two businesses into expense to profit.
SPEAKER_00Got it, got it. Okay, so let's talk about businesses. You know, people are listening to us, watching us, uh Mark. And uh if business owner wants to start look paying attention to some of those some of those items to control cost, what would you recommend? Where do they start? You know, it is there it definitely is, I think it's a process. You're not gonna get 100% the day one. But what is something you can share with them? Where can they start if they want to just start paying attention to some of that stuff?
SPEAKER_02Well, I always say, what's the check you hate writing the most every month? That's a good place to start.
SPEAKER_00That's totally a payroll check.
Identifying Cost Control Opportunities
SPEAKER_02Well, it's not even category because you know, we don't we do everything around the belly buttons, we don't do the belly buttons because that's the budget, that's the biggest check you ever write, right? Right. Well, they're all individual ones, but it's the biggest category usually, right? It's 50% of the uh of the revenue to the business. But usually, I mean, these days it's it always seems to be healthcare. And we've got amazing healthcare solutions that are pretty innovative and they can save businesses lots of money. Um, but that said, that's usually where people are starting these days because what does it do every year? It goes up whether you want it to or not. It just does. Yeah, you know, and and healthcare costs are out of control. So, you know, it it just I can go on for hours about that stuff. But but that said, but yeah, look at where do you spend a lot of money? How many vendors are you using for the same items in the same category? Right? Like this one client who's spending a million dollars, but they've got 400,000 with one vendor, 300,000 with another, and 300,000 with another one.
SPEAKER_01Why?
SPEAKER_02You're breaking up, you're breaking up your your your your ability to negotiate on a million dollar spend. Yeah, you only have 300,000 now, you only have 400,000. No, no, no, no, no. You're doing it all wrong. You gotta put them together because there's more value. If I'm getting a million dollars of spend versus$300,000 of spend, can I be more aggressive with my pricing? Sure. Because I'll make more money, right? Because now maybe it won't be a million dollars, maybe it'll be$700,000, but now I have it all. Yeah. You know, think about it that lot logically. So how much, you know, how much and then the other thing too is I always say, look at people you have a relationship with that you had a long, long relationship with. Start asking questions about this one vendor who they're spending$14 million a year. So it's a big, you know, they're big business, right? Where's your contract on pricing? Why would I have a contract on pricing? We have best pricing. My grandfather started the business, he used them. My father took over the business, he used them. When I took over the business, my father, I'm using them. Nine million dollars. Same quantity. But he was getting best pricing. Yeah, but not so much. So long time vendors, like I said earlier, the the the leaky button, leaky bucket, right? Price creep. Price creep is your leaky bucket. Okay, or you know, like with software, if you've got a lot of people in your business, but who's using the software? You have software for everybody. Well, are they all using those licenses, or did they like never use those licenses? Or do they use them like once a month? Well, if they use them once a month, they probably don't really need them. They only use them once a month because they logged down to see because I got a reminder to change their password.
SPEAKER_00Yeah. You know, software there's an 80-20 rule. You know, 80% people use 20% of the stuff?
SPEAKER_02Usually. It's like boom, it's like that across the board. It's that it's not just, yeah.
SPEAKER_00Interesting. So I'm trying to understand. So, what what what do business owners see where they say, listen, I I better talk to Mark, because uh, you know, what I'm looking at is not it's doesn't look right. So that's simply look at that, you know, the yearly billing, you know, how what do they identify? How do they how do they know that listen, I need help in this area?
SPEAKER_02Well, first of all, they can obviously call us because we'll look at everything. And if we don't see anything, or we know that you're getting best pricing, no charge. If we do see that there's an opportunity to help a business, well, then obviously we'll go under contract and then we'll try to help a business. But, you know, as I said earlier, most businesses think they're paying the proper pricing. Okay. You pay$19 a month for your line for your unlimited wireless, I do. And I don't have a lot of phones. Okay. How? Well, because we have, like I said, we have access to pricing that other people don't. And and I will tell you, I'll bet you that that people are paying$40 to$50 a line for unlimited with you know a hot spot and all this other stuff. I can't pay.
SPEAKER_00If you're talking to uh the a lot of Canadians listening, you know, we paid the highest bill in the probably in the world when it comes to telecom and and all the internet stuff. So over cost is highest in the world. So, you know, if you and any south of the board north of the border, it just we we don't have a competition. There's only three three telecompany companies, and and that that's in the market is controlled, so we pay much higher bill compared to we go to we come to US, much better pricing. You know, you guys not paying as much as the Canadians are.
SPEAKER_02Sure.
SPEAKER_00But still, I understand.
SPEAKER_02Is the service there? Is the is the service from a different provider from the US in Canada in most cases?
SPEAKER_00It is, it is, it is. So you get uh you have options. Good. So what can any message you want to leave for business owners who are looking to uh you know get better, you know, definitely, you know, you want to grow business, but you need to be efficient on uh more, you know, get a better you know return on your investments, whatever you're paying right now. Any word of wisdom you want to leave for uh business owners, uh Mark, the who wants to start this uh exercise and start looking into these things?
Final Thoughts on Business Efficiency
SPEAKER_02Well, obviously they can go to our to our website, expensiveproject.com, because we've got plenty articles on our website about all different areas. I mean, another one that we were looking at a couple years ago that we just started looking at again is workprints compensation, because workprint's compensation has gotten out of control in premiums. Yeah. And there's different services that you can use. If you do pay as you go versus quarterly premiums, which most or monthly premiums, which most businesses do, the insurance carry doesn't need to do an audit at the end of the year because pay as you go means they've getting your salary every month and you're paying the premiums at least on that salary. Yeah. And then the other thing, too, is we're finding so many clients don't have the proper coding for the employees. A lot of times you'll see salespeople that are internal being being quoted as external salespeople. Well, an external salesperson has a higher premium because why? They're out in the car, they're going to visit clients. An internal salesperson ain't doing nothing. They're sitting at a desk. Yeah. What kind of risk is somebody sitting at the desk? Okay, well, they dropped their coffee on them. Okay, well, that's not really gonna be a workman's complaint. You know what I mean? So, you know, we give down and then they degree. Well, I don't personally, I've got a guy who specializes in this. I mean, that's what he does for a living. That's all he does for a living. He looks at the stuff, he looks at, you know, why what are they charging? How are they charging? How are they coming up with the premiums? Oh, you know, and and and a lot of times we find errors. Yeah. Almost every time we find errors. I mean, I would say probably 95% of the time we find pricing errors in workmen's account. And it are you doing other things like wellness programs? Wellness programs can also reduce your cost of your other insurances. Not a wellness program offer. Well, in Canada's different because you guys got medic, you your medical is the government or you're like regulated, but in the states, you know, if you're offering wellness, but not wellness inside of the medical program, I'm talking about a separate standalone wellness program. You can save money on taxes, you can lower your premiums for Workmen's Cup, you can lower your premiums for your health insurance. Why? Because now you're doing proactive health versus reactive health. And proactive health saves on expenses, therefore, claims are less, therefore, your experience ratios go down. So there's so many different ideas that we have. Find it all on our website. We have articles about this stuff all over the place. You just have to go along.
SPEAKER_00Yeah, you know, I'm gonna include a link to your website below this video as well. People can click a button and they can uh connect. But you know, I hear you what you're saying. The business as a business owner, we run a business. You know, this this looking for these opportunities takes time and effort and a different different perspective and a different angle to look from. As business owners, we run a business on a daily basis, where we so we bombarded with uh what's you know, we're trying to grow at the top line and too busy with a so narrow focus. Yeah, we have so many blind spots. That's why I think uh we need experts like you to come for the different angle and take a look at that. So what's going on? Not only we focus on the growing at the top line, we also control the bottom line. So that's where the profit comes from.
SPEAKER_02Yeah, no, 100%. And you know, I have a Canadian client who is a CPA and he has a call center. And the solution he was using for his telephones was not integrated with his CRM system. I took a look at both. I said, Well, you're paying this for this and this for this, but we can integrate it for about 20% less. Is that something that would be helpful? What do you mean, integrate? I said, Well, you don't win the phone, right? It records it, it takes this, it takes that. Save a lot of time. Well, not only that, so now he's got one less person he has to pay for. Because it's fully integrated, because now someone's not transcribing stuff and copying stuff that may not get in right, right? It's all automated, it's all automated and it's all integrated. And he's paying less money. And now he's got one less employee that he has to hire. So he's growing his business, but he doesn't have to hire the extra employee to grow his business, right? Same amount of business. Just don't have to, anyhow. So, yeah, there's so many solutions out there that that that you know where people can, you know, really try and find more optimal ways to be more efficient. I mean, efficiency comes right to the bottom line.
SPEAKER_00Yeah. No, and and that's where the innovation comes from. You gotta find new ways of you know control your costs and grow your business, right? So I think that's what everybody wants to do. Good. Your book is on Amazon. Where can the find people can find your book and how can they connect with you? Your website or LinkedIn, how can they connect with you?
SPEAKER_02You can connect with me on LinkedIn. I mean, you can connect me through the website. You can obviously buy the book on Amazon. Buy the book, the book is not expensive. The reason why it's not expensive is I'm not looking to make money on the book. Have the book there for people to be able to use it and maybe gain some ideas that they can try internally first. If it doesn't work internally, then contact me.
SPEAKER_00A lot of a good example. You know, I gone through a few of them. It's it's but there's a lot of good examples there, some lot of good concepts. I learned quite a bit just by going through uh just quickly for the book. But you know, people who are listening or watching, I'll definitely recommend Hellas and I, you know, I learned so much from a conversation, reach out to you for conversation. Who knows where the discussion is gonna go? You're gonna gain so much perspective and and and get a copy of your book. You know, take a take a look. There's so many examples. I'm sure some of the examples can apply to your business, whatever business you're running, and uh, you know, save a lot of mistakes. And top of that, save a lot of money.
SPEAKER_02Absolutely.
SPEAKER_00Okay, good stuff. Thank you so much for time, Mark. But I appreciate your time. Thank you so much for being generous with your time. Enjoy our discussion, learn so much, and hope we talk soon.
SPEAKER_02Absolutely. Thank you. Appreciate it. Thanks for watching.
SPEAKER_00Like that.
SPEAKER_02Be welcome.