Where money goes.
WHAT TO CATEGORISE
Every cost, consistently.
WHAT TO SEPARATE
Direct costs, tied to sales Overheads, incurred regardless
WHY
Only the second can be reduced without affecting delivery.
WHAT TO RANK
Costs by size.
WHAT TO EXAMINE
The largest few, which is where savings exist Costs that grew Recurring costs nobody reviews
THAT LAST CATEGORY
Subscriptions, services and arrangements continuing by inertia.
WHAT TO CALCULATE
Each cost as a percentage of revenue, over time.
WHY
It shows whether costs are growing faster than the business.
WHAT TO WATCH
A category rising steadily A cost that scales with volume when it should not
WHAT TO QUESTION
Whether each cost produces value proportionate to it.
WHAT NOT TO DO
Cut the easiest rather than the largest Cut things that generate revenue
WHAT TO REVIEW
Annually in detail, monthly for anything unexpected.
