Control your G&A expenses

Controlling your G&A expenses is one of the most important requirements not only now, in a difficult economy, but long as the imaging business gets more and more competitive.
For years, it has been business as usual in the back office operations; if processing fell behind, the natural reaction was to add more employees to handle what was perceived as additional workload. Pretty soon, actual headcount grew to levels that could not be supported by the organization. Because employee expenses are the largest controllable expense area, G&A expenses were out of control. Orders were getting processed, but at a cost that could not be supported.
It is time to take a step back and re-assess how your back office is structured and determine if it still makes sense with the current and/or available technology. Understanding each person’s daily activities and tasks and how they measure up against what you need is a starting point. Beyond that, it would be time to reassess all of your current processes and you will most likely find that there are too many redundancies, unnecessary processes and inefficient use of available technology.
Periodic process inspection and, if necessary, re-design should be a regular part of business practices to make sure that you are as “lean and mean” as you can be. The ultimate goal being to continually drive down those G&A expenses that are leading to a degradation of your bottom line.
If you are setting a long-term target I suggest you need to have G&A expenses to 10% or less five years out. If you look at many of the companies that are entering the imaging space, VARs as an example, their G&A is below 10%. Competition is one consideration but changes in the industry are another driver. A4 will replace A3 at an accelerated rate as more copier companies introduce full A4 product lines. These new units will drive down average unit selling price, resulting in lower revenue for your company. You will need to be lean and mean to thrive so get focused on your G&A expense.
If I can help please contact me at boulden@strategydevelopment.org