2188 - Expense Management Mastery for Business Success with P3 Cost Analysts' Larry Levine

0:05Hey there, thoughtful listener. Are you looking for introductions to partners, investors, influencers, influencers, influencers, and clients? Well, I've had private conversations with over 2 ,000 leaders asking them where their best business comes from. I've got a free video you can watch with no opt-in required where I'll share the exact steps necessary to be 100 % inbound in your industry over the next six to eight months with no spam, no ads, and no sales. What I teach has worked for me for over 15 years and has helped me create eight figures in revenue for my own companies. Just head to upmyinfluence.com and watch my free class on how to create endless high-ticket sales appointments.

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1:05with us right now larry levine uh larry you're a business owner founder and you uh are an expense reduction consultant uh and i can't wait to get into that because right now especially as we're recording this right now that's a topic i think a lot of business owners are getting a little conservative with where their spend is and so forth we're going to get into that in just a second And Larry, before we do, tell me about what you are currently like doing for fun, hobbies, movies, TV shows, like anything you're into right now. Absolutely. Thank you, Josh. So to answer that question first, of course, I love to hike.

1:43I love to bike. I live near the Shenandoah Mountain Range, so I get out there as often as I can. And my kids took me out to last year. They took me out to the Dolomites in Italy to do some three or four days worth of hiking. If you've never been there, look it up. It's a great, great views, great hikes. For folks, hiking might seem like a pretty, you know, very simple thing to communicate. Are there any insights that you've gleaned from your years of hiking that you would recommend for someone to get more out of that hobby? Training, stretching. Really? Really? So absolutely. So I've hurt myself too many times, uh, hiking too aggressively on a hill that is too, too steep, uh, without, uh, because I didn't stretch in advance.

2:31So take the time to stretch, take time to learn how to stretch. Nutrition is important as well, but you know, more than anything else, stretching, bring, bring hydration with you. Yeah. And then you can get up to those mountains to see the, see the great views from the top. I can tell you, in my life, so I've done some endurance stuff, I've run some marathons, but nothing, now another thing is acclimation, right? So I'm at zero feet elevation here in Orlando. My daughter lives in Colorado Springs, completely different elevation. And then, what's that? The 12 ,000 feet, the 12 ,000 feet are in Colorado.

3:06So yeah, it's up there. And then we hiked Pikes Peak. And so we started, you know, we started at the bottom, we hiked up the back. And I'll tell you, I was there, it was only my third day there. And I can tell you that of all of the endurance things I've ever done, nothing was that hard and that humbling. You know, and it was just, I could not get enough oxygen. And it was so humbling to, you know, take like two to three steps and then have to take another break. It was literally at that level, which, so I'm with you. Like, you know, if I had more. The pipe in your chest. Oh, God. Yeah, it was really, like I said, you know, when we're talking about hiking, there's a pleasant walk in the woods.

3:51And then there's hiking, hiking. And I think that that's what you and I are kind of more talking about. So strength training, yeah, probably. Maybe stair climber, squats, you know, that sort of thing. Absolutely. Yeah, all that. Just training. Modern hikes, you know, get your cardio going and then also get your stretching of your shins, your calves, you know, get that going. Because you could easily, easily injure a calf muscle. I'm currently recovering from a fibula stress fracture. In a few weeks. Yeah. And it's, you know, it's frustrating. For those of us in our 40s on up, you know, stuff breaks or stuff gets hurt and it takes a little while to heal.

4:30And it's so frustrating. Larry, let's talk about cost savings and expense reduction, because obviously, when we think about profitability of a company, there's money that comes in and then there's money that goes out. And I think a lot of us as entrepreneurs are really focused on the money that comes in. But boy, if we're not really mindful of where the money's going out, there could very easily be some opportunity here. For sure. Most business owners are paying attention to the top line. They're paying attention to their product, how to get the product out, how to sell more of their product. And from an expense perspective, they're paying attention to the labor expenses, maybe some other more visible expenses, such as sales expenses, rent expenses.

5:16But there's a set of expenses that most business owners accept to be, they accept them as fixed expenses. And in fact, there's hidden money in many of those fixed expenses. Many of these expenses, the indirect expenses, shall we call them, the telecom expenses, the utility expenses, waste, uniforms, linens, property tax, things that don't make it into the product or service directly, usually, that the customer doesn't see. Those are called indirect expenses. More often than not, business owners assume they're fixed when, in fact, many of them are negotiable with the vendors. It doesn't hurt to ask.

5:52They're not going to raise the price on you. But more often than not, those expenses are negotiable. The challenge, though, is that business owners typically don't know what they're negotiable down to. If a business owner contracted with a waste vendor or a uniformed linens vendor, and for the sake of round examples, they were quoted$1 ,000 a month, the business owner may accept that as being, that's the cost. I'm just going to have to pay that price. or they may decide they want to spend less than that, say$900. Can we reduce it to 10 %? More often than not, the vendor is more than willing to do that.

6:34And everybody's happy at that point. However, the vendor is more than able to drop it down, even perhaps lower, 30 % or 40 % lower than that. Business owner doesn't know. They don't know what the cost levels are. Businesses like us, we do know what the cost levels are. We've had 30 ,000 client locations, so many years of business. We understand we've created a benchmark database on a product-by-product, geography-by-geography basis, skew-by-skew basis, and we've derived cost levels. And we negotiate these vendors down to cost level on behalf of our clients. So your waste expenses, you thought it was$1 ,000, you negotiated down to$900.

7:14We could probably get it to you for$600 or$700 a month in that example. That's true across the board for many, probably 10 or 12 expense categories. Some more, some less, but most are negotiable. What is keeping most business owners or business leaders from exploring some of the cost savings opportunities or expense reduction? Primarily two reasons. Number one, they're focused on their business. They're focused on growing, as we said before, growing their business, paying attention, trying to capture market share, trying to keep the roof on the building, especially in today's environment. But, you know, if they have the time, if they have the staff to do it, does the staff have the expertise?

7:56Have they worked for the telecom vendor, for the waste vendor, as our auditors have? Have they created the benchmark database to know what the cost levels are, as we have? Are they compensated? Is their finance team compensated on a dollar-for-dollar basis? And we didn't talk about this. Are they compensated on a dollar-for-dollar basis for every dollar they find? We are. So in general, their teams might be able to negotiate. They should. They should attempt to negotiate for steeper savings, but they probably are not going to do as well as a cost reduction consultant can with that expertise. And then, again, we're not going to modify.

8:35We're not going to change the top line. We're not going to change the direct cost associated with their product. We're going to be able to lower some of the midline expenses and hence increase the bottom line net margins for them. Yeah. So, boy, by the way, Larry, it's kind of funny. I'm listening to you. You are the yin to my yang, my friend. I work as a fractional chief revenue officer. So I am. Like, I'm laser focused on top line revenue. And when it comes to cost savings, like, it's not my lane. I don't know. You're going to have to work with someone like Larry to do that. What is the process like when you begin working with somebody?

9:15What's the initial conversation and then how do you decide or what does it look like when you begin engagement and what do you do? I guess what I'm looking for is what happens during discovery, what happens during the first week or so of engagement? Yeah, I was going to say discovery. So sometimes the client comes to us. Sometimes we reach out to the client. And if we're talking to a retail business or a multifamily community, we have a good set of multifamily community owner with multiple multifamily communities. We have a good sense where their expenses are going to be. We understand they may not have a lot of uniforms and linens and their telecom expenses may not be that high, but they probably have utility expenses, common air utility expenses.

10:01They may very well have, they have waste expenses for their communities. They have property tax expenses. So we'll focus that conversation into those categories and not bog down the conversation with other categories that are relevant. We ask them, we discuss with them where they may be experiencing, may be acknowledged that they have some expense challenges. Or I might be able to talk to them about, have you considered, have you looked at, what are your expenses? Can we look at those? Can we audit that for you? Our model is a contingency model. So if we look at their, whether they come to us or we come to them, we come to an agreement to look at two sets of those expenses, utility and waste, for example.

10:42if their waste expenses are on par, for some reason they were able to negotiate the best rates possible, and 90 % of our clients need our help, 10 % are already getting the best rates possible. If they're in that 10%, we audit them, we find they have the best rates. There's no fee. Our fee is contingent upon finding savings. So we go through the audit process, we discover where there may be savings. And in the second example, if there are savings, we discuss the savings opportunities with them. Maybe they're being overcharged with invalid charges. Maybe they don't have the best rates possible.

11:19Maybe they can optimize their pickup schedules. We're not going to tell them to burn the trash on the street. We're not going to tell them to turn off their lights. I mean, they know their business best on when the lights should be on, how much price they're producing. but perhaps we can optimize schedules and optimize rates, we present that to them and ask them for their permission to move forward and negotiate with the vendor to lower the rates for them. And then in a month or two after that, the rates are in effect. We look at their invoices and we share in that savings with them. Again, it's contingent.

11:52Our fee is contingent upon finding savings. If there are no savings, no fee. But if there are savings, in that prior example, if we're able to negotiate from$1 ,000 to$900, they got to run it down to$900. But if we brought it down to, for round numbers,$500, saving them an additional$400, we'll share in that savings for up to five years,$200 a month. In that example, it was$400, 50 % of that for up to five years. And we'll continue to monitor for them in case any errors or overcharges, invalid charges are reintroduced into their invoices. Wow. So what types of companies for you are just like, oh, it's like that meme where you're kind of rubbing your hands together and like, oh, yeah.

12:39Like, you know, for certain, like if someone's coming and they're in this space or this industry or this type of situation, you're like, oh, yeah, we're going to save you some money, my friend. So I can answer that two ways. So most businesses can benefit from a waste audit, regardless of the industry they're in. in most industries. And whether they're building widgets or selling services, as I said before, multifamily communities, restaurant groups, hotel groups, hospitality, anything healthcare, whether it be a hospital group or an urgent care group, an ophthalmology group, a pediatrics group, if they have multiple locations, if they're building, I don't care, building widgets, building trucks, automobile dealership groups.

13:23Think large groups. They probably have utility expenses and waste expenses. If they have multiple offices like a healthcare organization or education schools, they probably have copiers that they're leasing and way overpaying for. so there's no single industry that is best for us you know i have a background some of my peers have backgrounds and focuses you know we we focus we have a favorite industry um an industry we don't know as well but if you come to us and you're more than a few locations or you're a very large location except building widgets consuming a lot of power to build these widgets you have trucks shipping these products, you're producing a lot of waste, we could probably help you.

14:12As I said, as I kind of started to say before, we're able to help 90 % of our clients reduce those expenses by 30 to 40 % on average, sometimes 5%, sometimes as much. I remember my very first ever client, eight location retail group out of Massachusetts. We saved them 75 % on their waste expenses. and when we gave him the total what that would be per month for him, he said to us, I don't look at my waste invoices. I just pay them. And even if he was, what is he looking for? He doesn't know. He doesn't have the contract in front of him. He doesn't know what an invalid versus an invalid charge is.

14:51And even if there were no invalid charges, what does he, does he have the waste benchmarks? He doesn't have the low costs in his geography. He doesn't have it. So that's where we come in as an expert. So if you have legal problems, you hire an attorney. If you have to file your taxes, you hire a tax preparer. You have social media needs, you hire a social media consultant. You probably have cost reduction needs. Hire someone who has those skills that can do a better job than you can do, like you can't do for tax preparing or for social media. Larry, we've got your website linked up. In the, to our friend that's listening just right now, you can kind of click along.

15:38It's, I had shared online. It's a little bit of a longer URL. So we'll just have kind of the direct link there in the show notes for this podcast episode. But, you know, when folks go to your website or, you know, folks want to connect with you on LinkedIn, you know, to our friend that's listening right now and they're like, okay, I definitely want to have a conversation with Larry. What would you recommend they do next? So take a look at, if you're on the website, take a look at the website. You could look at us. You could look you could view us by industry. If you're in the hotel industry, in the auto dealership industry, look through there.

16:08You'll see some some similar businesses. So you can maybe see yourself there. If you're if you're thinking that instead, you know, I know I have waist problems. I know I have uniforms and linens challenges. You could look on a services basis from there or just simply give me a call. I'll click the click my Web page, you know, and we could have a conversation. and the discovery. As I said before, there's no fee unless we find savings for you. I love it. You can't lose. Larry Levine. I said that correct, right? This time you did. Thank you. Okay, Larry Levine. Again, cost reduction specialist, consultant.

16:46Your website, we have all linked up in the show notes, in the app. And again, anywhere you're listening to this, we've put that out there for you. Larry, it's been a great conversation. Thank you for the work you're doing. Thanks for having me. It was very fun.

17:26we are empowering one another as thoughtful leaders. And as I mentioned at the beginning of this program, if you're looking for introductions to partners, investors, influencers, and clients, I have had private conversations with over 2000 leaders, asking them where their best business comes from. I've got a free video that you can watch right now with no opt-in or email required, where I'm going to share the exact steps necessary to be 100 % inbound in your industry over the next six to eight months with no spam, no ads, and no sales. What I teach has worked for me for more than 15 years and has helped me create eight figures in revenue for my own companies.

18:08Just head to upmyinfluence.com and watch my free class on how to create endless high ticket sales appointments. Make sure to hit subscribe so that tomorrow morning, that's right, seven days a week, you are going to be inspired and motivated to succeed. I promise to bring positivity and inspiration to you for around 15 minutes every single day. Thanks for listening and thank you for being a part of the Thoughtful Entrepreneur Movement.