What Are You Cutting?

Following the lead of some of the blog posts that are focusing on the bad economy and how it affects operations at our property, I'm curious as to what services are being squeezed to make a leaner and meaner property. What are the first things on the chopping block?

What initiatives are you planning to lower operating costs and improve efficiencies? Are you focusing in any one area or looking at the three big areas: People, Process, and Technology?

One of the main expenses my clients and prospects are hoping to trim is the cost of insurance. This is definitely possible in many areas of the country because commercial insurance markets are still very soft when it comes to standard risks with a good loss history. Not every broker specializes in this type of insurance, but if you find someone who specializes, they can almost always find better coverage for less than you currently pay for it - especially if it's been 2 or more years since you last obtained competitive quotes.

it seems like when the ax dropped, the first option was marketing - we've cut back severely on our level of adverts, etc... except we then struggle with occupancy ... no win situation.

I just reviewed our budgets from a marketing standpoint and most of our properties went down to only print source - in some cases - none. I was able to keep most of them listed on the main online ad sources. All of our specialty advertising was cut - so no more balloons, professionally printed outreach material, refreshments, etc.

From what I can tell operationally speaking, we focused on renegotiating pricing with all vendors and were farily successful in getting lower rates for 2009.

Is training one of the items that are being chopped because of budget cut backs?

We didn't cut back on our training, but we are trying to do more Webex sessions than travel to sites. We offer Gracehill plus our own curriculm in house - focusing mostly on sales training.

Many properties we deal with have made similar comments. Everyone wants to make sure they get the best bang for their buck. Targeted and efficient marketing is essential. Dropping marketing altogether does not help with occupancies. Positive and proactive approach is what will save us all through these stormy times.

Luckily, we haven't cut back on training - if anything we've redoubled our efforts to get the most qualified applicants, so as to reduce the duplicity of continued basic training further on.

We cut all our print guide advertising and refocused those dollars on our residents and online resources.

To answer the question, on our property, we first cut projects that were not emergent, cut back on pool furniture replacement, deciding to not continue on upgrades, etc....