eKourier April 2020

FINANCE

WAR ON WASTE 2020 - CONTROLLABLE COSTS What a time we live in; drought, fires, floods and now a world pandemic!!! Incredible times and unchartered territory for many businesses, governments and individuals. What can we do…

• Labour Costs – believe it or not but business costs reduce when we take Annual Leave. What could be better – take a few days off and the business does better – sounds too good to be true but it is in fact the case. For everyone’s own health and wellbeing we should look to take our 20 days of leave every year and help the business – a win win situation. • Water – review our bills, has the usage gone up vs the prior month, what could be impacting this? The more we are aware and manage our controllable costs the better the business will do. Over and above the controllable costs are uncontrollable costs such as Land Tax and Council. Approximately 50% of all costs incurred at a storage centre are controllable in some form or another. We cannot reduce the controllable costs to zero. Total control- lable costs are around $32 million each year so if this can be reduced by 5% through cost reduction or cost recovery, the savings will be $1.6 million per annum! Let’s all work together through the very challenging times the world is facing to manage our controllable costs wherever we can. Stay healthy and stay safe… WORK T O G E T H E R THROUGH THE VERY CHALLENGING TIMES THE WORLD IS FACING TO MANAGE OUR CONTROLLABLE COSTS WHEREVER WE CAN. LET’S ALL

• Telephone – calls we make from land lines and phones can be managed. • Electricity – turn off lights, encourage our customers to be aware of usage and recover costs wherever we can. LED sensor lights have been tested at Mona Vale with other sites being reviewed. • Couriers and Postage – Mailplus are a significant cost. Look to review the number of days banking and mail is collected. Are mail collections required or could the mail be dropped off once a week at the nearest post box. Ensure Mailplus are charging correctly. • Other Costs – cleaning materials and what we buy for the office and centre – how much needs to be ordered, the quality of the products we buy. The move to Officeworks has been great in reducing costs and service has improved. • Insurance – we may not think we impact Insurance costs however if centre gutters are clean and buildings are well looked after, there will be less damage in storm events and insurance claims will be lower which will ultimately reduce Insurance costs. • Print and Stationery – look to move to digital wherever we can for our stationery needs. This has been an ongoing process over time and will continue to improve. • Repairs and Maintenance – probably the area where we can all have the biggest impact. Is what we are spending required or is it a nice to have? Can we do the work ourselves such as painting, cleaning, repairs etc? In tough business conditions like we are facing – the question would be “will this repair increase revenue?” If not, revenue generating, could we put it off for a while? Of course if the works are required to keep the centre operating or a safety risk then they need to be done.

H itting the panic button probably won’t help and we may make irrational decisions (hope you got your toilet paper!!). All we can do is manage what we can control. Covid-19 will impact many businesses and the economic impacts will be felt across Australia and the world impacting many businesses and individuals which will have flow on effects for Kennards Self Storage. Customer service and how we treat our customers will always be our top priority. Then we can manage our costs. The costs we can manage are controllable costs. Which costs are controllable and how can we impact them – • Advertising – our banners and marketing material can be re-used. • Bank Fees – the cheapest payment option is a direct debit from a custom- er’s bank account, however we should look to set up all customers on recurring payments. The cost of any manual payment is high to the business with additional admin time. • Cleaning – manage the cost of cleaning units, cleaners coming on site and also waste collections – are the bins full, are we recovering the cost? More to follow on this in the next few weeks following a tender with Suez for Australian Waste Collection Services.

Anthony Rous Chief Financial Officer

14 Kennards Kourier April 2020