Convert Fixed Costs to Variable Costs

In these unpredictable times, and companies are scrambling for additional cash. The old adage cash is king, is perhaps the most important advice for survival.

In simplistic terms, fixed costs by definition is a business costs, such as rent, that is constant whatever the quantity of goods or services produced. In contrast variable costs is a cost that varies with the level of output.

The following are samples of how to convert fixed costs to variable costs, with the simple intent of increasing cashflow. The other side of this strategy is increased profit and EBITDA.

  • Convert your employees from office bound to virtual.
    • Reduce your footprint in office space
  • Convert company cars to allowances.
    • Eliminate both capital payments as well as maintenance, insurance, not to mention the inherent risk of unauthorized gas usage.
  • Convert telephone systems to VIOP Cell phones
    • Reducing lease costs, and maximizing technology at a fraction of the cost

Obviously, each company is unique, and not every sample mentioned above will apply to each company. Similarly, the cost benefit and cash flow impact will vary by company. What ever you save should be significant to your company, regardless of size.

I am more than happy to sit with you, to strategically evaluate how you can leverage your company to exploit this strategy.