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  • #966727
    Ozzie
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    I thought maybe a discussion about turning cost centers into profit centers might be a great first thread at Flying Solo.

    I do realize that in most businesses this is not always possible or at first this may seem to be the case..

    examples:
    1]

    I have a business that uses a high download rate from an ISP [Internet service provision ] but every month I have an excess of about 10 gigabyte. This is normally wasted as the month rolls over into the next billing period. So I was thinking what if I on sold my excess to neighbors for enough to help cover the cost of the ISP service….

    Using wi fi the neighbors can log on and utilize ISP without contract etc etc and pay a small fee for doing so every month. offsetting the cost of my ISP enough to make a small profit.

    2]
    achieving referral sales commissions for services supplied to your business. i.e bookkeeping, accounting, etc.

    3] The cost of that web site could be paid for by supplier sponsorship in the first year and then every year after it woudl be mostly profit. [ small brochure style site can return about $300 a year for example] So the cost of the site is zero and it becomes a self standing profit centre in it’s own right.

    and I am sure there are many more….
    in small ways cost centres can be turned into profit centres with little effort and in some case significant profit can be made with only a small adjustment to attitudes and routines etc.

    care to discuss?

    #1020508
    Chris Bates
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    You’re not allowed to on-sell your connection to neighbors, etc. That will be a big time violation of your T&Cs with your ISP.

    #1020509
    soliddata
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    I am working with a friend who has some software that lets small businesses save time and money and gain control over their workforce planning. Their software improves rostering, timesheets, payroll etc. I am a referrer of theirs because I really like what I have seen it doing.

    Now the interesting thing that fits here, is that when they use this app, not only do they save money on time spent processing HR admin, but they also improve their rostering – and a small supermarket reported that within a couple of months they were saving 3% on their wages costs for that month – thus really the cost of software is improving their profits (or something like that)

    Kev

    #1020510
    Ozzie
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    Chris Bates, post: 24313 wrote:
    You’re not allowed to on-sell your connection to neighbors, etc. That will be a big time violation of your T&Cs with your ISP.
    agrees however one could fudge the rules a little by selling registrations to a “network” that happened to offer complimentary ISP services as a fringe benefit.
    However your point is well taken!
    The ISP industry is in need of restructuring any way as this sort of onselling is actually quite popular with various software packages out there to facilitate.
    Also it is quite feasible to purchase your ISP provision as a wholesaler thus reducing your own costs dramatically. Depending on volume of course…but there are some smaller ISP providers that are happy to establish reseller networks.
    The point of course is to use this only as an example of cost centre profit making.
    #1020511
    bradzo
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    My wireless “thingyamebob” has a feature – I think its called Tomizone or something, that allows exactly that – neighbours or others to access your connection.

    Its a DLink DIR-300.
    I haven’t turned that feature on yet, but hey, its worth another look! :)

    #1020512
    Ozzie
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    bradzo, post: 24388 wrote:
    My wireless “thingyamebob” has a feature – I think its called Tomizone or something, that allows exactly that – neighbours or others to access your connection.

    Its a DLink DIR-300.
    I haven’t turned that feature on yet, but hey, its worth another look! :)
    yeah Tomizone is one…make sure you read the fine print before signing up though…

    Once you establish a hot spot any where any one with the password can access it.
    however you need the ability for multiple passwords and user accounts with “caps” to really make a go of it…[which I haven’t got yet]

    #1020513
    King
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    ideas for

    • Cars
    • phone
    • printing

    would be interesting to hear.

    #1020514
    Steve_Minshall
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    King, post: 24454 wrote:
    ideas for

    • Cars
    • phone
    • printing

    would be interesting to hear.

    Cars: sign write for advertising

    Printing: one of our local estate agents sends out a glossy flyer about houses for sale in the suburb. Printed on the back are money off coupons for the fastfood/video outlets in the same shopping precinct. I thought that was clever, share/cover printing and give people a reason to hold onto the flyer at least until they cut it up for the coupon. So if it doesn’t hurt your own branding or reason for printing there is advertising space on anything you print.

    Phone: Dunno

    The trouble with a lot these things though is not letting them be a diversion so that you spend more time trying to onsell unused resources than you spend on your Knitting.

    #1020515
    Ozzie
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    A little story:
    I purchased a Toshiba SAT lap top to do my web work which I did mostly from pubic transport [trains] coffee shops and restaurants [ lifestyle choice ok]
    Firstly I had quite a few people enquire about the lap top [ commissioned referrals]
    Secondly, at the time I was using a new product first distributed by Three for USB mobile broadband. The number of enquiries I got was amazing.
    I approached 3 for some stickers to put on my lap tops lid and if they would be interested in commissioned referrals…to my surprise they were far from impressed…[ which was utterly amazing] – maybe a bad day hey?

    In the 6 months I used 3 I could have referral sold probably 20 or so of these $300 [ at the time ] packages. $6 K at say 20% commission is $1200…

    Thus paying for my lap top and broadband use simply by using the lap top in public.
    How many persons have an innate curiosity when a lap top is opened in publc?

    the lid is fantastic advertising space…
    thus turning a cost centre into a profit centre

    #1020516
    soliddata
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    Nice one Ozzie, laptop lids on public transport – I wonder how much people would charge me for “Backed-Up Securely by Solid Data” stickers on their laptop???

    Re the cars, I remember someone setting up a program in Australia a few years ago to bring together advertisers and cars… lets see…

    OK here found something:
    http://www.powerhomebiz.com/blog/2006/07/earn-money-by-putting-ads-on-your-car/

    Kev

    #1020517
    Army of One
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    Intriguing idea Ozzie – I think you may have been talking to my boss!

    Most of our admin staff have a reasonable level of proficiency with QuickBooks – so he had the ideaof internally ‘outsourcing’ the bookkeeping work from our accounting clients to these staff members.

    It works great – it doesn’t take much to recover the overhead costs, the admin staff learn new skills and the clients actually get better quality and more accurate and timely reporting as the work is supervised by their own qualified accountant.

    Lessoned learned – always try to look at your business from every possible angle and look for improvements.

    Kris

    #1020518
    Ozzie
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    Army of One, post: 24646 wrote:
    Intriguing idea Ozzie – I think you may have been talking to my boss!

    Most of our admin staff have a reasonable level of proficiency with QuickBooks – so he had the ideaof internally ‘outsourcing’ the bookkeeping work from our accounting clients to these staff members.

    It works great – it doesn’t take much to recover the overhead costs, the admin staff learn new skills and the clients actually get better quality and more accurate and timely reporting as the work is supervised by their own qualified accountant.

    Lessoned learned – always try to look at your business from every possible angle and look for improvements.

    Kris
    a good case study indeed…
    The challenge of converting cost centres into profit centres means that the “reality” of your cost to profit ratio improves which indicates a healthier business IMO. Sure it may not mean huge increases in profits generally but it does improve this ratio which is one of those things people look for when buying a business. [ well I have so I guess others have]

    So you have added bookkeeping to your lists of services with out increasing administration staff or professional staff…a straightforward and intuitive outcome. Well done!

    #1020519
    SteveDavidson
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    This is pretty much what I do for clients – take teams which are running at cost X per year, show them how to do the same or better for a third of that, then show them how to automatically generate additional freebie value that often bites a large chunk out of that last third.

    On occasion, it’s even enough to tip them over into becoming a profit centre, at least based on internal value generation.

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