Unlock Code: PRØF1T
TRANSCRIPT
Week two of unlocking profits, let’s goooo.
So for the next two weeks we’re going to be discussing expense-reducing measures to hopefully increase profit at your brewery. What do I mean when I talk about expense-reducing measures? Well, let’s start by an explanation of the P&L.
The P&L is structured very simple. We have revenue on top. That’s money coming in. We have cost of goods sold which is the cost of the beer that takes away from revenue. We have expenses. We have all of our other expenses.
That is taking away from revenue.
When you subtract cost of goods sold and expenses from revenue you essentially have profits, right?
So, it’s our goal to really understand what our expense structure is and what expenses are helping generate profit and what expenses are hindering profit.
So unlock code number five is: No expense is safe. No expense is safe at our brewery.
What do I mean by that?
I wish I could tell you the number of times I visit a brewery and I walk in and there are at least four empty desks unused and the brewery is paying rent on. Ok. I can’t tell you the number of times I’ve been looking over a set of financials and I noticed that a brewery is paying for multiple pieces of software because someone forgot to unsubscribe to one.
Same thing with janitorial services. Same thing with retainer legal services. Same thing with retainer HR services.
All of these are general and administrative expenses which, if you’re using them to their fullest and they’re adding value to the business to help generate profit, then these are a go. But if we’ve stopped using these services or we’re not getting the most use out of them then it’s time to take a very hard look and eliminate these expenses.
When you eliminate those expenses, profit will increase. We’re not going to substitute those expenses for something else. We’re simply eliminating them, okay?
Unlock code number five: No expense is safe.
It’s going to take a very hard look. It’s going to take a lot of work to take a very hard look at all of your recurring items.
A quick suggestion on how to do this: If you have a bookkeeper, if you have an accountant, if you have an office administrator — is take it one category at a time. Have that person report to you in black and white — you know we talked about urgency last week — have them report to you in black and white software costs.
What do those look like? List out all the vendors. Next week, professional services — or next day professional services — we’re not doing this over weeks. We’re doing this over days and we’re making decisions when that list is presented to you.
So first we do software, then we do professional services, then we do another category. Could be janitorial, could be cleaning, could be custodial. These are all the expenses that we just forget about and I’m curious how many you uncover that are no longer being utilized or can be consolidated. Alright?
Unlock code number five: No expense is safe.
Go get it done and let me know what you find.
Talk to you tomorrow.
Week two of unlocking profits, let’s goooo.
So for the next two weeks we’re going to be discussing expense-reducing measures to hopefully increase profit at your brewery. What do I mean when I talk about expense-reducing measures? Well, let’s start by an explanation of the P&L.
The P&L is structured very simple. We have revenue on top. That’s money coming in. We have cost of goods sold which is the cost of the beer that takes away from revenue. We have expenses. We have all of our other expenses.
That is taking away from revenue.
When you subtract cost of goods sold and expenses from revenue you essentially have profits, right?
So, it’s our goal to really understand what our expense structure is and what expenses are helping generate profit and what expenses are hindering profit.
So unlock code number five is: No expense is safe. No expense is safe at our brewery.
What do I mean by that?
I wish I could tell you the number of times I visit a brewery and I walk in and there are at least four empty desks unused and the brewery is paying rent on. Ok. I can’t tell you the number of times I’ve been looking over a set of financials and I noticed that a brewery is paying for multiple pieces of software because someone forgot to unsubscribe to one.
Same thing with janitorial services. Same thing with retainer legal services. Same thing with retainer HR services.
All of these are general and administrative expenses which, if you’re using them to their fullest and they’re adding value to the business to help generate profit, then these are a go. But if we’ve stopped using these services or we’re not getting the most use out of them then it’s time to take a very hard look and eliminate these expenses.
When you eliminate those expenses, profit will increase. We’re not going to substitute those expenses for something else. We’re simply eliminating them, okay?
Unlock code number five: No expense is safe.
It’s going to take a very hard look. It’s going to take a lot of work to take a very hard look at all of your recurring items.
A quick suggestion on how to do this: If you have a bookkeeper, if you have an accountant, if you have an office administrator — is take it one category at a time. Have that person report to you in black and white — you know we talked about urgency last week — have them report to you in black and white software costs.
What do those look like? List out all the vendors. Next week, professional services — or next day professional services — we’re not doing this over weeks. We’re doing this over days and we’re making decisions when that list is presented to you.
So first we do software, then we do professional services, then we do another category. Could be janitorial, could be cleaning, could be custodial. These are all the expenses that we just forget about and I’m curious how many you uncover that are no longer being utilized or can be consolidated. Alright?
Unlock code number five: No expense is safe.
Go get it done and let me know what you find.
Talk to you tomorrow.