P/L Responsibility

[recentgrad]

I have a semi-complex question. I was recently given P/L responsibility for a 10 million dollar operation. I am looking to improve margins and cut costs.

I was looking for general ideas on ways to save in shipping/sales/and operations.

I plan to contribute more capital to marketing and promotion, which in turn will help to increase revenues.

Basically just looking for some general ideas and concepts to remember when focusing on the P/L of a company.

Thank You

[Evan]

Negotiate with vendors, some may offer discounts if you do a significant amount of shipping and do a bit of "work" for them to make their job easier. I'm not sure of all the specifics, but companies like HSN or QVC are not paying the same price to mail a 10 pound item that you or I would pay if we went to UPS. They generally want things pre-sorted by mailing area, etc.

Increasing expenses to marketing/advertising will not always translate into higher sales or profit margins. In fact, it will do the opposite in the short-term, but could be beneficial in the long-term. Depends on what you're selling.

Instead of looking solely to cut costs, look to increase efficiencies in operations. Do you store too much inventory? If so, that's why you need a large warehouse, which increases a lot of overhead costs. A lot of other things can also be explored, but I find a more efficient operation does better than just looking to cut costs and improve margins.