Introduction
This week we continue our focus on the post pandemic re-opening of business. Other than dealing with customer and employee fears, there is nothing different or special about today's show except urgency. Unlike other expansions at the end of a contraction, this was not a structural - it was imposed. Normally a contraction (recession) is a result of over supply and decreasing demand awaiting a unplanned event to prick the bubble. In this case the demand still exists with diminished supply and we have sufficient information to predict the beginning of an expansion. The purpose of IBGR programming this month is to prepare the entrepreneur for the turnaround. it will require acting with urgency over the next 4 months. Show Objectives Principles of Lowest Cost Producer (LCP) Fixed Costs & Variable Costs
What You Need to Know Achieving Lowest Producer (LCP)
What You Need to Do Apply ABC (Activity Based Costing) to all Functions
Reduce Fixed Costs Although this is much larger than just fixed costs, for now let's identify 10% cost savings and make it disappear, frugality is a great thing.
Reduce Variable Costs Determine current capacity – is it at or close to 90% of what is possible;
Alternative Math for Budgeting Let’s get out the box and rethink how we look at profitability: Open 3 bank accounts
Next Show: B.022 Marketing & Sales Internal Objectives
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