Saving Money on Essential Expenses

I think everybody would agree that communication is an essential part of doing business. Today I am going to talk about mobile and internet for business.

Mobile and internet plans can be a major expense to any business, whatever their size. A lot of businesses tend to overlook the importance of having the right plan, inclusions and carrier for their business. I understand that identifying these components can be confusing and in some cases time consuming. However, there are a number of things that you can do to elevate these concerns. First all businesses should monitor their communication needs on a regular basis and review their plans every time they come up for renewal. What I mean by this is first monitor usage on mobiles, internet downloads and reliability.

While online communications by way of email, Facebook, Twitter, etc have become more common calling your clients should still be a very important form of communication. Understand how your business connects with it clients will form the basis for how your mobile and internet plans are structured and how important coverage is.

I have just recently reviewed the mobile plans for a client, their initial assessment was that they could reduce one of their mobile plans from the unlimited plan to the next plan down as this now had $950 worth of included calls. Based on the previous three months’ usage this appeared to by a sound strategy as it would save $35 per month. However, their carrier had changed the way they billed mobile calls about 6 months ago. Once we reviewed the usage using the new billing process the average call spend was $1,200 per month. If they had changed the plan based on the old billing process the result would not have been a $35 saving but a $350 increase.

Another client predominantly uses 3 of their 4 mobile for data, again they were ready to recontract their plans. We reviewed the usage of all 4 mobiles and found that the one that is mainly used for calling could be “dropped” to the next plan down because 35% of the calls were to other mobile in the company and their carrier had “free inter account calls” but 2 of the 3 mobiles that are mainly for data needed to increase their data allowance. Most businesses when faced with this situation increase the plan for extra data, however, good carriers have data packs which is a more cost effective options – ie data packs start at $5 per month while a plan upgrade is usually a minimum of $10 per month.

The other option for each businesses was to look at changing carriers which is relatively easy in today’s market. This is where coverage becomes an issue, not all carriers offer the same coverage in all areas. This can be a bit of a “nightmare” as they all advertise coverage figures that appear almost the same, without recommending any carrier the fact is that in the metropolitan areas Telstra, Optus and Vodafone offer approximately the same coverage. Therefore changing carriers in not an issue from a coverage point of view, just make sure the feature and benefits of the new carrier are appropriate for your needs. As for rural and coastal areas this is not the case.

Again we worked with a business on this issue. They had a fleet of 5 mobiles, the particular carrier they were with did not have great coverage in their areas of operation. This meant that they were missing a lot of calls, because of the nature of their business potential customers did not leave message they just ring their competitors. We estimated that they were losing 5 enquiries per mobile per week, 25 enquiries in total, their conversion rate from enquire to customer is 23%. This meant they were potential losing 5 new customers a week, not counting the flow on affect from “word of mouth”. They average sale is $150 per customer, this equates do an additional $750 per week or approximately $3,000 per month. Their current plan fee was $45 per mobile per month or $225 for the fleet. We recommended changing to the carrier with the best coverage in the areas of operation, however, the plan cost per mobile was increase to $130 per month, increasing their month bill by $425. While this is a big jump the potential increase in sales was $2,500 (after factoring in the increase to the mobile plans). They were obviously sceptical about this but decided to go with our recommendation, their net result after 4 months is that average monthly sales are up 15 or over $2,000 for a $425 investment.

The right mobile and internet plans are not always about saving on the plan fee it is about getting the right plan for the business based on usage, coverage and potential return of investment. I will cover fixed line communications in a later article.

Remember “Turnover is Vanity, Profit is Reality and Cash is King!”

Quote – “There is no limit to what a man can do, or where he can go, if he doesn’t mind who gets the credit.” Ronald Reagan

The One Document Every Business Forgets To Have

There are many helpful documents that businesses should have, these included a Business Plan, Marketing Plan, Financial Forecast, Budget and Business Profile. Most small businesses have the first four but do not see the need for a profile. This document is potentially one of the most important, a well-crafted profile should form the foundation ofContinue Reading

Understanding Margins

Many companies offer a mixture of services that are usually complementary, however, have different cost bases and margins. While the sales for these different services are allocated separate categories the expenditure is quiet often group together. This practice may appear to save time and make the P&L look easier to understand there is an inherentContinue Reading

Hello world!

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!