Florida Neurology Group P.L.
Locations: Two in Fort Myers, one in Estero, one in Cape Coral

What it cut: The group shaved the cost equivalent of two full-time employees—about $60,000 a year, including benefits—by outsourcing tasks such as bookkeeping, data entry and collections. In addition, an electronic call system had been used to confirm appointments, says practice administrator Shari Thompson, but patients found it impersonal, and devoting a full-time staffer to making calls would have been too costly. The group solved both problems by contracting an employee’s retired mother who was looking to supplement her income. And bookkeeping is now handled by a new mom who prefers to work from home. "It was kind of cool because we’re helping the community with reducing the unemployment rate in a sense, but we’re keeping our costs down in doing that," Thompson says.

Electronic medical records, which the group has used since 2000, have improved efficiency and cut paper, postage and storage costs. About 1,100 square feet of space used for storing medical records was converted into revenue-generating physical-therapy rooms and allowed the group to increase its size to six physicians and one advanced registered nurse practitioner without adding support staff. Thompson says it’s also aided in staff retention.

What it can’t cut: Fixed costs such as rent, utilities and insurance. "The aftermath of the hurricanes quadrupled my liability coverage. I don’t have controls on those," Thompson says. She adds that office supplies and costs associated with their electronic data interchange could be negotiated or reduced, but it would not make a significant impact because those two items represent less than 10 percent of the group’s variable expenses.

Florida Neurology Group continues to offer above-average wages and benefits and makes generous contributions to an employee profit-sharing plan, she says. It pays 100 percent of health insurance for its 25 full-time employees. With health insurance expense increasing 17 percent annually, she adds, "Each year it gets harder to maintain their benefit packages." But those benefits, as well as two annual staff parties, continuing education and an employee-recognition program have kept the turnover rate at a low 7 percent. "I’m stretching my dollars by investing in employee motivation and retention programs," Thompson says. "By doing that, I don’t spend money on recruiting, advertising and training."

Trimming tips: Solicit the staff. Asking about their on-the-job challenges can sometimes improve efficiency. For example, someone might have been regularly faxing information that could be e-mailed, Thompson says. "Sometimes they don’t realize what idea they’ve just given you," she says.

Stevens Construction
Location: Based in Fort Myers, with projects in Lee, Collier, Highlands and DeSoto counties

What it cut: After sales volume declined by 30 percent, the company cut two positions with salaries in the low six figures and eliminated two more through attrition. It has 20 employees. "We had kind of over-hired about a year ago, because we had $40 million worth of work on backlog," owner Mark Stevens explains. Then the company lost $15 million in contracts as clients pulled out of planned marina and surgery center projects. In previous years, Stevens Construction distributed about $25,000 to charitable organizations. This year, it is cutting monetary donations in half, although it still encourages volunteering. "[When] times are kind of tough, you want to try to keep the morale of everybody up," Stevens says.

When business is strong, buying office supplies and making blueprints are done in the quickest and most convenient manner, Stevens says. By finding cheaper services, cutting out waste and using fewer supplies because of reduced workload, the company was able to save about $10,000.

Shopping around for its janitorial service helped the company find a less expensive option that trimmed annual expenditures another $3,300.

Stevens also changed the location of last year’s Christmas party to a more affordable hotel venue. "It probably cost half as much money; people had just as much of a good time," he says.

What it can’t cut: Rent. Insurance also has been one of those untouchable costs, but Stevens is hearing that others are experiencing a decline in premiums, and he’s hoping for the same. He also expects his worker’s compensation costs to decrease because he’s had only one claim since opening the company four years ago.

Trimming tips: Take a hard look at every item on your budget. Ask yourself these questions: Can it help you make any more money? Will it make your customers happy? If the answer is no, then cut it, if possible.

Partners Bank
Location: Naples

What it cut: Expansion plans. The bank, which had $56 million in deposits last year, was originally slated to open five branches, but has scaled back to be a two-branch bank, says President and CEO Robert R. Sudbrook. "Our strategy [currently] is to invest in quality personnel in the loan area, not in brick and mortar," he says. The cost savings of shelving those plans was approximately $550,000 for first-year operations, which includes furniture and fixtures, rent and personnel.

In fourth quarter 2007, the two-and-a-half-year-old bank eliminated several "non-customer-contact" staff positions and consulting positions, resulting in savings in the low six figures. That freed up funds to hire two senior lenders, key revenue-generating positions.

What it can’t cut: Benefits. "We don’t feel it’s right to hang a carrot out there and pull it away from somebody who’s changed careers to work at our bank," Sudbrook says.

Trimming tips: Use moderation. When bank officials recognize fat, they cut it, but they understand that "under those layers of fat, there is muscle," says Sudbrook. As he puts it: "When I walk out of the room for an extended period of time, I turn the lights off. I don’t necessarily turn my car off when I [come to] a red light."

Balancing the Budget

Business consultants and accountants are in demand as business owners turn to them to help their operations run lean.
"I have been very busy this year trying to either cut corners with them or downsize their companies," says Karen Mosteller, a certified public accountant and partner in Markham Norton Mosteller Wright & Co. P.A., which has offices in Naples and Fort Myers.
When the economy was booming, companies didn’t bother streamlining, and they overspent on overhead expenses. The mentality was, "We’re so busy, we don’t have time to watch our expenditures," she says. "A lot of money went out the door because of inefficient processes and systems."
Many of the business clients Mosteller is advising have been operating without budgets, she says. "This year, I’m saying, ‘You know what? We need to make a budget.’ It’s forcing them to go line-by-line and look at every cost."
The first step in recession-proofing a business is to focus on the balance sheet, according to the American Institute of Certified Public Accountants. Companies should be doing that all the time, but it’s even more critical when cash is scarce, the group says. It involves analyzing expenses and revenue and researching cheaper options, while keeping an eye on how the changes could affect the company’s service or product.
Depending on the industry, companies should avoid certain cuts, she says. Fixed costs such as rent, utilities and phone service are generally the last to go. Mosteller recommends against making moves that would impact quality, service and other factors that allow a company to stand out from their competition.
"There are always ways to trim," says Mark Stevens, owner of Stevens Construction in Naples. Before work slowed, he focused on whether he saw a benefit of a line item in relation to the cost. "Now you look at it and say, ‘What can I do without?’" says Stevens, whose company specializes in commercial and healthcare projects.
Perks such as meals, entertainment and marketing efforts are often the first to go, Mosteller says. Unless contracts are approaching expiration, fixed expenses such as rent, telephones and other utilities are tough to trim. Mosteller believes everything else has the potential to take up less space on a budget.
Rate cuts for workers’ compensation, which are estimated at 18 percent, and property/casualty, which is dropping 15 percent to 40 percent, are aiding businesses, says Mosteller. Although certain people can exempt out of workers’ comp, she doesn’t recommend it, noting that even one claim could be more expensive than the coverage. Shopping for health insurance instead of blindly renewing a policy has allowed some companies to find cheaper options.
Trims here and there are intended to avoid eliminating jobs. At times, though, it doesn’t work. Payroll is typically a company’s biggest expenditure, and Mosteller sometimes has to deliver bad news to business executives: "It’s a business decision. I know it sounds cold, but it’s either cut back on staffing, or you’ll be out of business."