Cost Management
The majority of turnaround situations involve companies with either flat or declining revenue and cost management is a critical activity to decrease the burn-rate. Kibel Green's goal is to identify cost reductions and provide management with the tools to fuel dramatically improved efficiency.
Our initial assessment centers on four basic principles:
- The current run-rate of the business and breakeven point
- The business' structure when it was growing, profitable, and cash-positive
- The determination of true variable and fixed costs
- The areas for reducing costs and streamlining operations
It is the determination of truly fixed costs that is most critical to near-term cost management and cash flow. Kibel Green focuses on eliminating or renegotiating major operating expenses including:
- Leases
- Insurances
- Compensation
Labor costs are among the most significant for many businesses and our initial approach to Rightsizing is to fundamentally understand the business. At the forefront of our approach is the mindset of creating structures that maintain or improve the Client's effectiveness with fewer resources. It is only then that we, for example, might recommend the consolidation of functions through centralization of the use of technology.
Kibel Green recognizes that Rightsizing must be precise. Broad, across-the-board salary cuts could have a detrimental and lasting impact whereas a well-thought surgical restructuring that strengthens a business’ competitiveness is often embraced by employees.
We propose that if you know of a business that would benefit from a conversation focused on Cost Management, contact Kibel Green to discuss how we can work together.
