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Posts tagged ‘Expenses’

How Teamwork Cut a Hotel’s Expenses by over $120,000

The hotel management explained, versus announced, to all staff the “need” to cut expenses “across the board,” as much as $120,000.

 

To kick off the effort, all managers – salaried staff – volunteered to take a 10 percent reduction in salary. “To start.” In addition, they agreed to pay 50 to 100 percent of certain expenses “out-of-pocket,” and non-reimbursable later by the hotel business.

 

Examples: Vehicle gas for local driving, association membership dues, event registrations and meals, and business entertainment.

 

They opted to fly 100 percent coach seats for all hotel-related business travel. Also, they gave up their vacation and bonus packages for one full year.

 

Then, the entire staff got accountable, and very creative.

 

1. Each department set a goal to reduce its budget by $10,000.

 

2. Management and all department directors and supervisors agreed, committed to, and announced: “No staff member would be let go.”

 

3. Then, the staff members in each department voted themselves pay cuts: 50 cents an hour for part-time employees; $1.00 an hour for full-time. Like the management they gave up their vacation pay for one full year. (A big sacrifice for employees with families.)

 

4. Each staff member assumed responsibility for reducing his or her supplies budget by at least 10 percent. The supplies had to relate specifically to his or her job description. Also, management’s productivity expectations for staff members was set in proportion to the reduction in supplies and materials available for them to do their work.

 

Examples: Painter. The “paint shop” expense reduction goal: 25 percent.

A. Less expensive paint would be ordered and used for low traffic and less visible areas.

B. Used rags still in good condition would be soaked, laundered and reused.

C. Worn, essential brushes would be replaced with mid-brand products – eg. Linzer, Branford, Arro Worthy, Merrit, Bestt Liebco, Proform. Worn, rarely used brushes would be replaced on an as needed basis during the tight budget year.

       Note: Read “Paint with Budget Cuts: Your Paint Shop Brushes,” posted March 07, 2015.

 

Examples: Maintenance techs. Maintenance shop” expense reduction goal: 15 percent.

A. All recyclable parts, from no-longer usable air conditioners, would be removed, cleaned, catalogued, and stored for making future repairs.

B. Parts, which were tarnished or mildly corroded, were cleaned instead of replaced.

C. Some parts were painted and reused, until replacement parts could be budgeted.

 

5. Each department group launched a “team support” program.

A. Whenever possible, team members shared rides to and from work.

B. Staff that were parents, especially of younger children, created a plan to save each other babysitter and transportation costs.

 

6. A related “Share My Ride” program was implemented interdepartmentally.

Example: Keisha, a housekeeping supervisor, picked up and dropped off PBX operator Elsa at her apartment complex’s front entrance, on days that both worked the same shift.

 

7. Departments shared supplies, tools and equipment whenever and wherever possible. This practice reduced overall purchasing expenses by 15 to over 20 percent with some essential items.

 

8. Monthly, each department hosted its own “carry-in” lunch. During every shift.

 

9. The hotel kitchen sent no good food to the dumpster. Especially leftovers or over-cooking from guest/conference banquets, dinners, buffets, etc.

A. The leftover food was made available to all staff members at meal and break times.

B. Depending on the quantity of leftover food, staff could pack “doggie boxes” to take home at the end of their shift.

 

The hotel management incurred no major problem – and no resistance – from any department or any staff member in meeting the budget cut needs.

 

Everyone pulled together to make it all happen. They protected their own jobs and livelihoods by helping to protect each other’s jobs.

 

They focused on need. They prioritized. They got very creative.

 

Two Engineering Department examples:

 

  1. A maintenance tech attended a technical college two evenings a week. To catch his connecting bus, he had to clock out one hour earlier those afternoons. A coworker passed the college on his way home each day. So, he offered the tech a ride to the college’s front entrance. The tech was able to work his full eight-hour shift, and could afford to pay a few dollars to the coworker for the rides each week.

 

  1. The painter generated free supplies from construction supply and paint stores where he did business. Also, he tapped the superintendents of several large commercial contractors that he knew. In kind, he arranged for the store managers to be able to (1) test out a few new product and equipment lines at the hotel and (2) videotape the new products being used. The construction superintendents received comp stays for their families at the hotel.

 

Hotel budget cuts provide a great opportunity for teamwork in action. At its best! And, at every level: organizationally, interdepartmentally, departmentally.

 

It invites tremendous creativity, collaboration and cooperation on a small-to-large scale. Most important, at a particularly stressful time, team-driven hotel budget cuts bring people together.

 

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An early “HAPPY ST. PATRICK’S DAY” to all ye Irish lads and lassies.

A special “Hello” to everyone in the Chicago area.

 

Thanks for visiting “Painting with Bob.”

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Copyright 2015. Robert D. Hajtovik. All rights reserved.

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Painting Budget Cuts: Something to Work Around, and With!

$ START HERE $! 

Tools and supplies: “Buy in bulk.” They cost less that way, normally. And, you will use those brushes and roller covers every day!

Careful! That includes sandpaper, caulking, spackling, masking tape and paper, clean rags, and breathing masks. Oh well, the price has just gone up.

 

The message here: You can only do so much in order to save and show increased profits. It has always been standard policy to expense out certain unavoidable things that come off the top. If you try and change that equation, here is where “debt” shows its ugly face. But let’s not go there unless we have to do so.

 

What do you do then?

 

Every month, you will have fixed costs that have to be paid. Sometimes, there will be “additional” costs that you won’t see coming. Don’t anticipate. Plan!

 

Make sure you have a “basic” ledger for your accounts. Include “Accounts Receivable” and “Accounts Payable.” Don’t forget accounts for “Petty cash,” “insurances,” and “Taxes.”

 

Every cost, expenditure, and outlay of cash must be accounted for.

 

Here are some general guidelines to help you work through those budget cuts.

 

1. Never assume, or absorb, the cost of the needed project products and materials yourself.

Make certain that those items are paid for up front, by the customer, before the work begins. No cost to you.  Examples: Primer, paint, stain, varnish, wallcovering.

 

2. Figure in the cost of all related items. Include them in your project estimate or projection presented to, and agreed upon by, the consumer.

Try not to overlook the “small stuff.” It can add up fast, without you knowing it.  Examples: Vehicle gas, oil, and repairs; faxing, long-distance calls.

TIP: Get that agreement in writing, before you start any phase of the project.

 

3. On a weekly basis, update your ledger. Prepare payments to creditors at the same time. Generate a reliable system that works for you. One with a low margin for error.

 

4. Properly schedule and “budget” the money for equipment repair and maintenance.

Ensure that the equipment, and more expensive tools, which you count on most to do the work, will operate correctly and efficiently. When you need them! Do not let them become neglected, and inoperable.  Examples: Spray guns and hoses, compressors, power washers, scaffolding, etc.

 

5. Account for your time. That is the largest part of a budget. Generally, you can charge (1) by the “hour,” (2) as part of your “salary,” or (3) by the project. Whichever method you choose, charge according to the gross and net incomes that you require to provide for your business and personal needs.

6. Figure in  total operating cost, plus 20-30 percent profit; divide by 30. This is the amount of gross revenue that you need to pull in every day to succeed.

7. Pay your creditors promptly, and regularly.

8. Remember: Greed and irresponsibility do not make a good budget.

 

 

A painting budget is like most other budgets. Simplify it as best you can.

 

 

Build your net profit slowly over time.

 

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Stay afloat! Budget safely!  Thanks for visiting “Painting with Bob.”

 

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