This page contains a Flash digital edition of a book.
A Savings Strategy


bargaining table.” Offering timely payment is another promising maneuver. “In some cases, we ask for a discount for paying an invoice within five days, instead of the usual 30 or 40 days,” he explains. “In these difficult times, a lot of people are strapped for cash, and so we’ve been successful with this approach. One vendor gives us 10% off.” And if a lower price still can’t be had? “Work the edges,” suggests Atwood. “Request


better terms, added service, or free items thrown in. It’s about winning the war, not every battle.”


Value-added worth


“The most important lesson a buyer must learn is how to distinguish worth—how to get the right value at the right price,” posits Marks. You need to ask yourself whether you always want the lowest price. Wouldn’t you be willing, in some instances, to pay more? Wouldn’t you pay more for depend- ability, ease of use, or durability?


Determine whether the plumber is reliable; find out if he’ll be there on a Sunday night or a holiday, because that’s when emergencies inevitably happen.” “You definitely need to do your homework,”


urges Atwood. In addition to checking on the expe- riences of a prospective vendor’s customers, he suggests that clubs regularly reconsider how their current suppliers are performing. “You should reevaluate all your vendors yearly.” Once the list of would-be vendors has been


narrowed, the next step, according to Synnott, is to provide them with a request for proposal (RFP). “This part of the procurement process isn’t a secret, but I think it’s something a lot of people miss,” he says. “You want to get at least two or three bids— work them off one another. And, while there will likely be some back-and-forth, insist that they pres- ent their best price the first time around.” Such due diligence is essential, but, Synnott under-


“EXPERIENCE TELLS US THAT CLUBS CAN USUALLY SAVE, AT MINIMUM, 5% OF THEIR COSTS WHEN THEY REALLY HONE IN. THIS IS WELL WORTH SOME ADDED ATTENTION.”


“You might be able to get the lowest price … but


it might not be what you really want.” Marks’ bottom-line advice: “Negotiate effectively


and where it makes sense … and prioritize— don’t, for instance, spend $20 of your time on a single $10 product.” Synnott heartily concurs. How frequently he


reexamines purchases and the amount of time he spends on each review varies. “It depends on the item,” he says. “For example, a product like toilet tissue will be reshopped about every six months to a year.” Whenever a price goes up, he launches an immediate inquiry. He’s equally conscientious when it comes to shopping vendors. “Ask for references,” he recom- mends. “Make sure a com- pany can deliver the right amount of what you need and when you need it.


stands, even the best-laid plans often go astray. So, to be well prepared in any—and every— event, he also prepares an emergency budget. “For example, last year we were 10% busier than usual,” he explains. “That meant that our paper usage went up. But we don’t want our facilities direc- tor buying cheap toilet paper that feels like wood just


because he’s struggling to keep within budget. That can ruin the members’ experience. So, to avoid tying people’s hands that way, we earmark about 0.5% of the total budget for unexpected occur- rences. And, another example: we don’t want a bad winter, requiring costly snow removal, to cause lingering budget headaches well into June.” The critical fact that industry professionals


need to keep in mind, all the time, is the different ways in which expense savings and revenue increases affect a club’s bottom line. “If you save $100, that’s pure profit,” points out Atwood. “But, if you increase revenue by the same amount, only half of it might be left after you’ve paid all the associated expenses.” “Unless you look at it from that perspective,


things will quickly fall apart,” warns Synnott. “A dollar saved is, in truth, a dollar earned.” —|


– Patricia Glynn, p.glynn@fit-etc.com


58 Club Business Internat ional


| SEPTEMBER 2011 |


www. ihrsa.org


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122