March 27, 2025 • 27 mins
Where is your firm bleeding cash, and what can you do about it?
In this episode, James sits down with Larry Levine of P3 Cost Analysts, who works with companies doing $20M to $500M+ to recover tens (sometimes hundreds) of thousands in unnecessary expenses—without cutting staff, renegotiating client contracts, or sacrificing service quality.
You’ll learn:
- Why CFOs and controllers often miss cost-saving opportunities hiding in plain sight
- The most common “indirect” expenses that drain margin
- How to spot silent overcharges in waste, utilities, telco, and more
- Why Larry’s team only gets paid if you save money
If you’ve ever wondered whether you’re truly optimized—or just coasting on assumptions—this episode will make you think twice.
You've built something real. Now make sure you are keeping as much revenue as possible!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to CFO Chronicles the secrets behind
success, the go-to podcast forfractional CFOs and accounting
firm owners who want to attractmore high-paying clients and
increase their revenue.
Hosted by James Donovan fromNine Two Media, this podcast
dives into marketing strategiesspecifically designed for lead
(00:22):
generation and clientacquisition.
In each episode, you'll hearfrom industry leaders sharing
their success stories, and Todaywe're joined by a lady who's P3
Cost Analyst, a cost reductionfirm.
Speaker 2 (00:54):
Larry, I'm so excited to have you on the show hearing
about how P3 Cost Analyst helpsout your clients, what you do
for them, the value you bring tothe marketplace and how you got
into this space.
So, larry, without further ado,welcome to the show.
Speaker 3 (01:08):
Thank you so much.
I'm excited to be here.
This is very cool.
Speaker 2 (01:11):
Larry, let's go back a little bit before P3.
What's your background beforegetting into this cost reduction
firm?
Speaker 3 (01:21):
Sure, there's a little bit of a story here.
So I graduated college so manyyears ago, but out of college I
joined a series of high-techfirms.
I'll call that part of my lifeLarry 1.0.
I worked with a few name brandcompanies that you may recognize
the names of now or thecompanies they became.
I worked with Data General,which got purchased a few times
(01:42):
and is now part of Dell.
I work at Lucent Technologies,which is now part of Nokia, and
a few other companies you didnot hear about, you would not
know about.
And then in 2007 or so, afterso many high-tech bubble bursts,
I bought into a home carefranchise in Massachusetts and I
(02:03):
, with my business partners, ranthat for 14 years.
I'll call that part of my lifeLarry2.0.
That ended during COVID in 2021.
We sold the business back toour franchisor.
My daughter was graduatingcollege and was relocating to DC
, and shortly after shegraduated and moved to DC, I
(02:23):
followed her.
After I sold the business andmoved to DC, I followed her
after I sold the business.
Of course, I followed her towhat we call DMV DC, maryland,
virginia.
I'm like half an hour away fromher, so I'm now in Maryland and
shortly after I landed inMaryland.
Following my daughter days tothe area, I bought into p3 cost
analysts as a franchiseeproviding, as you said, cost
(02:44):
reduction services to ourclients.
We help them reduce theirindirect vendor overcharges.
Speaker 2 (02:52):
Awesome, awesome.
I'll need to change the introthen, because we're speaking
with Larry Levine 3.0.
Okay, cool.
Speaker 3 (02:59):
I'm happy to have that.
Speaker 2 (03:01):
Yeah, awesome.
So tell me a little bit aboutthe cost reduction world,
because our background as amarketing firm working with a
lot of tax planning, taxprofessionals, fractional CFOs a
big part of what they do isexpense reduction.
You know strategies to reducetheir taxable income.
(03:21):
How much crossover is therefrom what fractional CFOs and
tax planners are doing to youbeing a core cost reduction firm
?
Speaker 3 (03:32):
I think there's perhaps two or three answers
there.
So our experience is that mostCFOs are interested in reducing
costs for their direct expenses.
They see their indirectexpenses as being mostly fixed.
We could talk about what thatis Direct expenses for, let's
say, an auto dealership group.
Our cars is their serviceorganization, might be the brand
(03:54):
and the building that they'rein.
For a hotel group, the directexpenses tends to be beds and
restaurants and the TVs in therooms.
But there's a series ofindirect expenses that support
the businesses, these businessesthat most clients don't
consider and they take forgranted.
That's the telephone systems,the utilities that keep the
(04:15):
place warm or cool, the wastesystems, the uniforms and linens
, the vendor payment systems,property tax.
I listed five and we supportanother five or six after that.
Those are what we take care ofand, as I said, most CFOs, while
they want to reduce thoseexpenses, I find that their
focus tends to be more on thefixed, the direct expenses, and
(04:39):
they see the indirect expensesas fixed and in fact they're not
necessarily fixed.
I think you asked how we workwith and how we overlap with
them.
More often than not we ask ourclients to see us as an
extension of their teams,extension of their financial, an
analyst team, extension oftheir procurement team, and we
work on their behalf,negotiating with their vendors
to reduce overcharges thatshould not be on their bills, on
(05:02):
their invoices, to reduce ratesthat could perhaps be
negotiated lower.
When you as a business obtainwaste services or telephone
services or uniform servicesfrom any one of a number of
vendors, you're offered a rateor a series of rates for these
services and more often than notyou accept them.
If you don't accept them, youmay want to try to renegotiate
(05:24):
them by a few points.
If it's $1,000 per whatever itis you're purchasing, you feel
that you want to get a fewpoints off and you ask can we
get it for $900?
More often than not the serviceprovider is going to say yes,
because there's still a largemargin there.
We know that because over theyears we've created a benchmark
(05:44):
database, a cost level benchmarkdatabase.
So we know, on a service byservice, sku by SKU, geography
by geography basis, what thecost level is for each of those
services, for waste services,for uniform services, and we're
able to negotiate on theirbehalf to bring those rates down
to those levels and affect areduction of cost for the
(06:05):
business On average 30% to 40%cost reduction for 90% of our
clients.
And our fee is acontingency-based fee.
Our fee is contingent uponfinding savings.
If we cannot find savings, iffor one reason or another you
already have the best rate andthat happens sometimes there is
no fee for our services.
(06:25):
But if we do negotiate your feedown from in the example that I
just gave, you brought it downto $900, but maybe we brought it
down to $500, saving you $400.
We'll share in that fee 50-50.
So we'll bill you, in thatexample, $200 a month for 36 or
60 months in exchange fornegotiating that rate for you.
Speaker 2 (06:50):
That's awesome what I'm hearing is everything's
negotiable and there's no realwhat's on the sticker.
It doesn't mean that's theprice and that kind of goes for
anything.
Speaker 3 (07:00):
I've heard people go into Macy's and try to negotiate
rates.
Those are direct expenses there.
But you're correct,Everything's negotiable.
Speaker 4 (07:10):
You just have to know how to negotiate.
Speaker 3 (07:12):
If you're my client and you're going to your waste
provider to ask for lower ratesbeyond the $900 in that example,
you're probably not going toget much.
You're going to be told that'sthe rate.
If you go to AT&T or Verizon orPacWest to try to renegotiate
your telephone rates or your gasrates from your gas company,
(07:33):
electricity, your copier ratesfrom Sharp I'm not picking on
anyone in particular's commonname You're more than likely not
going to get far.
You may get someplace, butyou're not going to get far more
than likely not going to getfar.
Speaker 2 (07:45):
You may get someplace , but you're not going to get
far In some cases.
Speaker 3 (07:47):
I remember my first ever client, an eight location
retail business in Massachusetts.
We were able to bring theirwaste services down 75% and
during the process he said to meI don't look at the bills, I
just pay them.
And even if he was looking atthe bills, what is he looking
for?
He doesn't know what he'slooking for.
He doesn't have the cost levelfor that service, for that bin
(08:09):
size, for that pickup frequency,for that geography.
He doesn't have the knowledgeof whether or not the fuel
surcharge on his bill for thewaste pickup is contractually
allowed.
He doesn't have the backgroundof having worked at that vendor.
So we're there, as I said,we're an extension of his
(08:30):
financial analyst team with thebackground and that knowledge.
Speaker 2 (08:35):
It's interesting.
What you're saying is, I feellike the most actionable item
right now is to just I mean one.
You need to learn how tonegotiate, and chris voss has a
great book never split thedifference.
I'm sure you're familiar withthat one with that but just
going going to your vendors andwherever all your expenses are
and almost just playing aroundfor a bit to see, okay, where,
(08:57):
where can I save a couple pointshere?
Because if you never ask, theanswer is always no, but it's.
It's very motivating whatyou're saying right now.
How did you go from owning ahome health care company to
jumping into being aprofessional negotiator?
Speaker 3 (09:14):
No, so I will offer.
Let me answer the last partfirst, and we may want to audit
this, edit this out.
I am not the negotiator, so I'mthe role I, even though I'm a
franchisee and I own my businessand I'm reaching out to two
hotel groups and multifamilycommunities and all of the other
groups and on and on, I'm notdoing the negotiation.
(09:35):
The audit team, as I saidbefore, we have a utility
auditor, we have a set of wasteauditors, we have uniform zoom
auditors.
We have on and on these guys,these being the guys that have
worked at those companies beforeand have the daily access to
the benchmark database.
They are the ones doing thenegotiation.
I'm enabling the conversation,I'm as part of every
conversation, but I don't havethose live negotiation skills,
(09:57):
the Chris Voss skills.
I have some of them, but I'mnot utilizing it with the
vendors.
I'm not communicating with thevendors.
Speaker 2 (10:04):
Okay, that's fair.
I mean you're in thenegotiating world let's call it
or the negotiating industry.
But how do you go from yourpast role for 14 years?
Speaker 3 (10:17):
Sure I can answer that question.
It's a loaded question, solet's back up a little bit
further.
So for however many years priorto that 20-ish years, I was an
individual contributor.
I ran program management groups.
I ran development groups.
That was fun.
More often than not, Idelivered through an
(10:42):
organization of people.
My success was dependent on agroup of people as well as
myself.
As I said, I left that industryin 2007 due to one or several
high-tech bubble bursts, and9-11 was a contributing factor
in that as well.
Back in 2001, five, six yearsprior to that.
So when I bought into the homecare agency, I joined with two
(11:06):
other business partners.
That team evolved over time,but I had business partners the
entire time, and the thoughtprocess there was I have no more
bosses, I work for myself, when, in fact, I work for them.
I work for all my employees, Iwork for all their families, I
work for all their clients.
So I had 100 bosses and I feltI needed a little more.
(11:29):
After 14 years of some successesand a lot of lessons learned, I
felt that I wanted to be lessdependent on business partners
and dependent solely on myselfand working with a team of other
individuals Everybody at mybusiness.
Everybody at PEEF more oftenmore than not most people at
PEEF we are independent businessowners, llcs, independent
(11:52):
contractors, individualcontributors, whatever it may be
.
We're working for ourselves andwe're dependent on each other,
but we're not within eachother's businesses.
So I think this model to try toput a bow on the answer here
fits me better than havingpeople, other business partners
that I'm responsible to and for.
Speaker 2 (12:13):
Interesting and you're working with some pretty
massive size businesses.
I would say you mentionedbefore we hit the recording on
average of 20 mil to 500 milrange, which is pretty big.
Speaker 1 (12:25):
Yes.
Speaker 2 (12:26):
I mean the range itself, but also to be making
half a billion dollars a year.
That's not a small company.
How do you find new clients towork with?
Because I'm guessing this isn'tfacebook ads, because you're
not.
You're not finding businessesthat large through, maybe, so
that's a good question.
Speaker 3 (12:42):
We answered that part first.
Um, businesses for the mostpart are not looking on facebook
for their for for vendors towork with.
Businesses may or may not belooking on Google AdWords.
Businesses may or may not belooking for LinkedIn ads, but I
find my leads because they'renot clients yet, they're
(13:04):
prospects.
They turn into leads that turninto clients and it's a big
funnel.
Many prospects turn into a verysmall list of actual clients
because not everybody believesthey need our services.
We could talk about that.
Prospects are not at alldifficult to find.
If you're a part of the businessand you have a passion for
manufacturing, or if you have apassion for automobiles, or if
(13:29):
you have a background inutilities, you know that space
and you know how to pull up alist of automobile dealerships.
Or you know how to pull up alist I mean I could do it right
now a list of orthopedicsurgeons, the top 100 orthopedic
surgeon practices in the UnitedStates.
It's easy to find thosebusinesses and more often than
not, it's easy to find thepeople that we reach out to the
(13:49):
most, which is typically the CFO.
The CFO is not looking for costreduction.
He knows who in hisorganization is looking for cost
reduction and beyond thebackground and looking for lists
driving down the street.
If you want to drive through anoffice park and one of our
services is small parcelshipping If you want to find
(14:12):
businesses that have large,small parcel shipping, if you
want to find businesses thathave large, small parcel
shipping expenses, just go intoan office park and look for
FedEx and UPS trucks.
If you want to find businessesthat have large waste expenses,
go into an office park to seewho has the waste vendors, the
green bins, the blue bins in theback of the malls.
Vendors the green bins, theblue bins in the back of the
(14:33):
malls.
It's go through a go through ashopping mall and there are
probably 50 brands there thatare manufacturers that have
manufacturing expenses, that areretailers that have retail
expenses and because of that andthese manufacturers are
shipping to probably 300 retaillocations they have FedEx and
(14:54):
UPS expenses.
So, okay, you know you got thebrand.
You go through the mall, youget 50, 100 of these brands and
now you go to their main websiteor any one of a number of tools
, find the CFO, find thepresident, find the chief
procurement officer or somebodyand try to make a connection.
No shortage of hundreds ofthousands of millions of
businesses out there that canuse cost reduction.
Speaker 2 (15:17):
It's very creative the way you're speaking about,
just like the signs to look forand, like you know, one plus one
equals two.
If you see this, then it meansthat and you keep going.
You mentioned again before wehit record that that a lot of
firms don't think they need costreduction but you guys come in
(15:38):
on a contingency basis.
Essentially, the offer is we'regoing to help you guys save a
ton of money and until we do,you don't pay us anything.
Who's saying no to that?
That sounds like a prettyno-brainer offer.
Speaker 3 (15:51):
The groups that say no to us initially, and
sometimes forever, are thosegroups that have financial
analysts, slash AP, slashprocurement teams that are
responsible for this.
And there's a perhapscontroversial opinion here, a
(16:11):
piece of a mindset, that I'mpaying.
I'm the CFO, I'm paying thisteam to do their job.
They're doing their job.
I'm paying them hundreds ofthousands, if not millions of
dollars to do the job.
Why do I need to bring you in?
They're doing their job.
So the question I ask the mostis how are they compensated for
their findings?
We're compensated dollar fordollar for everything we find.
(16:31):
If you said, if there's nofindings, there's no fee, and
the more findings, the more feefor us.
So are they being compensatedfor their findings?
Do they have a background?
Does your accounts payableperson that pays the waste bills
, utility bills?
Have they worked at WasteManagement or Public Services,
(16:54):
at&t, whatever your utilityservice is?
Do they know how to negotiateon their behalf?
Do they have the contract infront of them?
The contract is typically notwith AP.
The contract is with theprocurement team.
Sometimes the AP team has it.
Are they studying every invoiceto verify that the invoice is
contractually valid?
(17:15):
Do they have access to costlevel data.
So that's the argument we gothrough the conversation we go
through with the client, withthe CFO if they will have that
conversation with us at allabout why what they're doing is
not as effective as what we anda few other competitors can do.
(17:37):
Sometimes it comes back it's toogood to be true, or I'm not
willing to pay you 50% Again.
If you brought it down from$1,000 to $900, I could bring it
down to $500, saving you $400.
I'm not willing to pay you $200for saving that, but in the
meantime you're paying them $400.
(17:57):
You're paying them 100%indefinitely, but you only have
to pay us 50%, $200 for 36 or 60months.
There's two service levels.
We could talk about that.
Sometimes we're able toconvince them of that to move
forward with us.
Sometimes it's just you know weare the best negotiators in the
world.
There's nobody does about thisthat clients.
(18:18):
This is how I hear the argumentcoming back from clients.
We know how to negotiate.
This is what we do for a living.
Um, we already have the bestrates.
Speaker 2 (18:26):
I've been doing this for 30 years, probably not yeah,
it sounds like there's probablya bit of ego at play, which, to
a certain degree, could be fair.
I mean, like you said, wealready have a full team in
place.
We're paying.
Maybe you don't even want thatlike the curtain to be revealed
of oh my goodness, I've beenpaying this much money to people
(18:47):
and they haven't been doingtheir job, so we know that we
don't.
Speaker 3 (18:53):
You and I had a pre-interview.
For any of us listening to this.
I did not say the word ego toyou, but that is the word that
is what I use when I talk to mypeers.
There's an ego involved,Whether our clients want to
admit it or not.
My feeling is that more oftenthan not, ego gets in the way of
doing the right thing for thebusiness.
In some cases, there areemployees that don't have a
(19:14):
vested interest in the business.
That's why I reach out to theCFO or the president or somebody
that's been installed with afair amount of equity in the
business.
I get the sense.
This is true also when I'mdealing with government
organizations.
It's not my money, it'staxpayer money, so it's fine.
Well, I was recently dealing alittle bit of a sore point with
(19:37):
myself.
I was recently dealing with avery large government-related
organization paying I'll try tobe a little vague $3 million a
year for a service that we feltcomfortable.
We were able to renegotiate to20% or more cost reduction, and
even at 10% it's still a largewin for them and they moved
(19:59):
forward.
That's pretty far along thepath Reviewing our contract,
saying it's illegal.
But they chose to go anotherpath which is not going to be
anywhere near as effective, butit might have been easier.
There are options.
There are many options.
Clients can work with grouppurchasing organizations, gpos,
(20:22):
and sometimes they can negotiaterates on their own and they're
thinking that's easier.
In some cases go through a GPOor a pre-negotiated rate, state
level rate for services.
In most states, services forany government entity, whether
it be schools or the citygovernment for electricity, for
(20:44):
copiers, for cleaning, for anykind of services are negotiated
in advance.
So the particular entity canchoose to take that off the
shelf at that point quoteunquote discounted rate rather
than running their own RFP.
That is easier, for sure, thanrunning your own RFP, but we
could work with you to run thatRFP and taking it off off your
hands entirely and get you evena better rate 20, 10, 20, 30%.
(21:07):
And if you're talking about ifyou're talking about spending
only $50,000 or something,saving $500 is not worth
anybody's time.
But if you're spending 3million a year and I could save
you three hundred thousand ormore, yeah, that to me seems
like a large amount of money.
Speaker 2 (21:26):
but when you're dealing with an umpteen billion
dollar entity, um, and it's notmy money, it's not their money
and they're not equity in thebusiness.
Speaker 3 (21:31):
It's a challenge, so you hit a little bit of a nerve
there, but that's.
I'm glad I actually put it outthere that's good.
Speaker 2 (21:38):
Good, that's good.
Okay, so last question for you,larry, and probably maybe a
tricky one to answer, but anactionable step somebody could
take to one start going to theirvendors, whatever the size of
the company is.
But maybe a piece of advice totip the scales in their favor on
(22:00):
the negotiating side of thingswell, I was going to say this
before.
Speaker 3 (22:03):
So I mentioned by saying I'm.
We started by talking about the20 million to 50 million a
million dollar business.
Far below 20 million dollarsthey're not.
The business is not spendingenough for us to get engaged and
we're not going to spend thetime.
We have minimums on each of ourcategories.
But the business themselvesshould go back to the vendors.
And I mean, even if they'respending $500 a year, the vendor
(22:24):
doesn't really know room.
But if they're spending a fewthousand dollars a year for
waste services, for uniforms,linens, but which may be, but
they may be below a service, askit doesn't have to ask.
Ask for ask it doesn't have toask.
Ask for 20% discount inexchange for renegotiating a
five-year contract.
(22:44):
Be on top of your invoice.
Sometimes you just don't havethe background, as I mentioned,
to know what should be on theinvoice, what should be on the
contract or not.
But the businesses that arelarger, they often don't have
the time.
They're running their business.
They're probably.
You know, in today's economymore and more businesses are
trying to do more with less andthey just don't have the time to
(23:06):
worry about midline expenses.
If they do, if they do have thetime, do what I suggested about
the small businesses Study upon what the rates are.
If you can Study up on whatyour contract looks like on what
the rates are, if you can studyup on what your contract looks
like, educate the AP team to belooking at the invoices in the
contract to verify that in fact,what they're being invoiced for
is correct, and then, of course, as I mentioned, try to
(23:27):
renegotiate rates.
You may get a few points off ofthat.
If you can't or you don't havethe time, here I am.
Speaker 2 (23:34):
Perfect, that's what a great close.
How can people get in touchwith you then to continue this
conversation?
Sure I'm assuming you'll putsomething at the bottom of the
(23:56):
screen that gives myconversation get in touch with
you and hopefully save a ton ofmoney.
Larry, thank you so much forcoming on and sharing all this.
There's so much knowledge andvalue here and it's motivated me
to go look at where ourexpenses are and try to shave
off a couple of bucks here andthere for the exact same thing
you're already getting.
Speaker 3 (24:15):
I'll go as far as to say and feel free to edit this
out that if you can refer anybusiness to me, or anybody here
can refer any business to me,I'd be more than happy to pay
referral fees.
So, even if you don't have thebusiness and the expenses
directly, if you know people whodo and can make these
introductions and I can helpthem, I'll help you as well.
Speaker 2 (24:31):
There we go.
If that's not enough of areason to reach out to Larry, I
don't know what is.
Larry, thanks again for comingon.
I really appreciate it.
Speaker 3 (24:38):
Thanks, James.
I appreciate the time.
Thank you.
Speaker 4 (24:40):
Thanks for tuning in to this episode of CFO
Chronicles the secrets behindsuccess.
I hope you found value intoday's conversation.
As we wrap up, I'd love for youto do two things.
First, make sure to subscribeto this podcast so you don't
miss any future episodes.
If you enjoyed today'sdiscussion, please rate and
review the show.
It helps others discover theinsights we share here.
(25:04):
Second, if you're ready to takeyour business to the next level
and attract the high-endclients you deserve, head over
to accountingleadsnowcom orclick the link in the show notes
to book your strategy.
Call.
It's time to position yourselfas the advisor your clients need
.
And don't forget you canconnect with me on LinkedIn to
stay up to date on what'shappening in the world of
accounting and financial growth.
We've got more exciting topicscoming up, so stay tuned for the
next episode of CFO Chronicles.
(25:25):
Until then, keep pushingforward.
Your growth is just onestrategic move away.
Speaker 1 (25:31):
Thanks for listening to CFO Chronicles the secrets
behind success.
We hope today's episodeprovided valuable strategies to
help you attract morehigh-paying clients.
Be sure to subscribe, followand share with fellow
professionals.
Connect with us on LinkedIn andleave a review or comment to
join the conversation.
Your feedback helps us bringyou the best insights in finance
(25:54):
and marketing.
Until next time, keep strivingfor success and unlocking your
business's potential.
Welcome to CFO Chronicles the secrets behind
success, the go-to podcast forfractional CFOs and accounting
firm owners who want to attractmore high-paying clients and
increase their revenue.
Hosted by James Donovan fromNine Two Media, this podcast
dives into marketing strategiesspecifically designed for lead
(00:22):
generation and clientacquisition.
In each episode, you'll hearfrom industry leaders sharing
their success stories, and Todaywe're joined by a lady who's P3
Cost Analyst, a cost reductionfirm.
Speaker 2 (00:54):
Larry, I'm so excited to have you on the show hearing
about how P3 Cost Analyst helpsout your clients, what you do
for them, the value you bring tothe marketplace and how you got
into this space.
So, larry, without further ado,welcome to the show.
Speaker 3 (01:08):
Thank you so much.
I'm excited to be here.
This is very cool.
Speaker 2 (01:11):
Larry, let's go back a little bit before P3.
What's your background beforegetting into this cost reduction
firm?
Speaker 3 (01:21):
Sure, there's a little bit of a story here.
So I graduated college so manyyears ago, but out of college I
joined a series of high-techfirms.
I'll call that part of my lifeLarry 1.0.
I worked with a few name brandcompanies that you may recognize
the names of now or thecompanies they became.
I worked with Data General,which got purchased a few times
(01:42):
and is now part of Dell.
I work at Lucent Technologies,which is now part of Nokia, and
a few other companies you didnot hear about, you would not
know about.
And then in 2007 or so, afterso many high-tech bubble bursts,
I bought into a home carefranchise in Massachusetts and I
(02:03):
, with my business partners, ranthat for 14 years.
I'll call that part of my lifeLarry2.0.
That ended during COVID in 2021.
We sold the business back toour franchisor.
My daughter was graduatingcollege and was relocating to DC
, and shortly after shegraduated and moved to DC, I
(02:23):
followed her.
After I sold the business andmoved to DC, I followed her
after I sold the business.
Of course, I followed her towhat we call DMV DC, maryland,
virginia.
I'm like half an hour away fromher, so I'm now in Maryland and
shortly after I landed inMaryland.
Following my daughter days tothe area, I bought into p3 cost
analysts as a franchiseeproviding, as you said, cost
(02:44):
reduction services to ourclients.
We help them reduce theirindirect vendor overcharges.
Speaker 2 (02:52):
Awesome, awesome.
I'll need to change the introthen, because we're speaking
with Larry Levine 3.0.
Okay, cool.
Speaker 3 (02:59):
I'm happy to have that.
Speaker 2 (03:01):
Yeah, awesome.
So tell me a little bit aboutthe cost reduction world,
because our background as amarketing firm working with a
lot of tax planning, taxprofessionals, fractional CFOs a
big part of what they do isexpense reduction.
You know strategies to reducetheir taxable income.
(03:21):
How much crossover is therefrom what fractional CFOs and
tax planners are doing to youbeing a core cost reduction firm
?
Speaker 3 (03:32):
I think there's perhaps two or three answers
there.
So our experience is that mostCFOs are interested in reducing
costs for their direct expenses.
They see their indirectexpenses as being mostly fixed.
We could talk about what thatis Direct expenses for, let's
say, an auto dealership group.
Our cars is their serviceorganization, might be the brand
(03:54):
and the building that they'rein.
For a hotel group, the directexpenses tends to be beds and
restaurants and the TVs in therooms.
But there's a series ofindirect expenses that support
the businesses, these businessesthat most clients don't
consider and they take forgranted.
That's the telephone systems,the utilities that keep the
(04:15):
place warm or cool, the wastesystems, the uniforms and linens
, the vendor payment systems,property tax.
I listed five and we supportanother five or six after that.
Those are what we take care ofand, as I said, most CFOs, while
they want to reduce thoseexpenses, I find that their
focus tends to be more on thefixed, the direct expenses, and
(04:39):
they see the indirect expensesas fixed and in fact they're not
necessarily fixed.
I think you asked how we workwith and how we overlap with
them.
More often than not we ask ourclients to see us as an
extension of their teams,extension of their financial, an
analyst team, extension oftheir procurement team, and we
work on their behalf,negotiating with their vendors
to reduce overcharges thatshould not be on their bills, on
(05:02):
their invoices, to reduce ratesthat could perhaps be
negotiated lower.
When you as a business obtainwaste services or telephone
services or uniform servicesfrom any one of a number of
vendors, you're offered a rateor a series of rates for these
services and more often than notyou accept them.
If you don't accept them, youmay want to try to renegotiate
(05:24):
them by a few points.
If it's $1,000 per whatever itis you're purchasing, you feel
that you want to get a fewpoints off and you ask can we
get it for $900?
More often than not the serviceprovider is going to say yes,
because there's still a largemargin there.
We know that because over theyears we've created a benchmark
(05:44):
database, a cost level benchmarkdatabase.
So we know, on a service byservice, sku by SKU, geography
by geography basis, what thecost level is for each of those
services, for waste services,for uniform services, and we're
able to negotiate on theirbehalf to bring those rates down
to those levels and affect areduction of cost for the
(06:05):
business On average 30% to 40%cost reduction for 90% of our
clients.
And our fee is acontingency-based fee.
Our fee is contingent uponfinding savings.
If we cannot find savings, iffor one reason or another you
already have the best rate andthat happens sometimes there is
no fee for our services.
(06:25):
But if we do negotiate your feedown from in the example that I
just gave, you brought it downto $900, but maybe we brought it
down to $500, saving you $400.
We'll share in that fee 50-50.
So we'll bill you, in thatexample, $200 a month for 36 or
60 months in exchange fornegotiating that rate for you.
Speaker 2 (06:50):
That's awesome what I'm hearing is everything's
negotiable and there's no realwhat's on the sticker.
It doesn't mean that's theprice and that kind of goes for
anything.
Speaker 3 (07:00):
I've heard people go into Macy's and try to negotiate
rates.
Those are direct expenses there.
But you're correct,Everything's negotiable.
Speaker 4 (07:10):
You just have to know how to negotiate.
Speaker 3 (07:12):
If you're my client and you're going to your waste
provider to ask for lower ratesbeyond the $900 in that example,
you're probably not going toget much.
You're going to be told that'sthe rate.
If you go to AT&T or Verizon orPacWest to try to renegotiate
your telephone rates or your gasrates from your gas company,
(07:33):
electricity, your copier ratesfrom Sharp I'm not picking on
anyone in particular's commonname You're more than likely not
going to get far.
You may get someplace, butyou're not going to get far more
than likely not going to getfar.
Speaker 2 (07:45):
You may get someplace , but you're not going to get
far In some cases.
Speaker 3 (07:47):
I remember my first ever client, an eight location
retail business in Massachusetts.
We were able to bring theirwaste services down 75% and
during the process he said to meI don't look at the bills, I
just pay them.
And even if he was looking atthe bills, what is he looking
for?
He doesn't know what he'slooking for.
He doesn't have the cost levelfor that service, for that bin
(08:09):
size, for that pickup frequency,for that geography.
He doesn't have the knowledgeof whether or not the fuel
surcharge on his bill for thewaste pickup is contractually
allowed.
He doesn't have the backgroundof having worked at that vendor.
So we're there, as I said,we're an extension of his
(08:30):
financial analyst team with thebackground and that knowledge.
Speaker 2 (08:35):
It's interesting.
What you're saying is, I feellike the most actionable item
right now is to just I mean one.
You need to learn how tonegotiate, and chris voss has a
great book never split thedifference.
I'm sure you're familiar withthat one with that but just
going going to your vendors andwherever all your expenses are
and almost just playing aroundfor a bit to see, okay, where,
(08:57):
where can I save a couple pointshere?
Because if you never ask, theanswer is always no, but it's.
It's very motivating whatyou're saying right now.
How did you go from owning ahome health care company to
jumping into being aprofessional negotiator?
Speaker 3 (09:14):
No, so I will offer.
Let me answer the last partfirst, and we may want to audit
this, edit this out.
I am not the negotiator, so I'mthe role I, even though I'm a
franchisee and I own my businessand I'm reaching out to two
hotel groups and multifamilycommunities and all of the other
groups and on and on, I'm notdoing the negotiation.
(09:35):
The audit team, as I saidbefore, we have a utility
auditor, we have a set of wasteauditors, we have uniform zoom
auditors.
We have on and on these guys,these being the guys that have
worked at those companies beforeand have the daily access to
the benchmark database.
They are the ones doing thenegotiation.
I'm enabling the conversation,I'm as part of every
conversation, but I don't havethose live negotiation skills,
(09:57):
the Chris Voss skills.
I have some of them, but I'mnot utilizing it with the
vendors.
I'm not communicating with thevendors.
Speaker 2 (10:04):
Okay, that's fair.
I mean you're in thenegotiating world let's call it
or the negotiating industry.
But how do you go from yourpast role for 14 years?
Speaker 3 (10:17):
Sure I can answer that question.
It's a loaded question, solet's back up a little bit
further.
So for however many years priorto that 20-ish years, I was an
individual contributor.
I ran program management groups.
I ran development groups.
That was fun.
More often than not, Idelivered through an
(10:42):
organization of people.
My success was dependent on agroup of people as well as
myself.
As I said, I left that industryin 2007 due to one or several
high-tech bubble bursts, and9-11 was a contributing factor
in that as well.
Back in 2001, five, six yearsprior to that.
So when I bought into the homecare agency, I joined with two
(11:06):
other business partners.
That team evolved over time,but I had business partners the
entire time, and the thoughtprocess there was I have no more
bosses, I work for myself, when, in fact, I work for them.
I work for all my employees, Iwork for all their families, I
work for all their clients.
So I had 100 bosses and I feltI needed a little more.
(11:29):
After 14 years of some successesand a lot of lessons learned, I
felt that I wanted to be lessdependent on business partners
and dependent solely on myselfand working with a team of other
individuals Everybody at mybusiness.
Everybody at PEEF more oftenmore than not most people at
PEEF we are independent businessowners, llcs, independent
(11:52):
contractors, individualcontributors, whatever it may be
.
We're working for ourselves andwe're dependent on each other,
but we're not within eachother's businesses.
So I think this model to try toput a bow on the answer here
fits me better than havingpeople, other business partners
that I'm responsible to and for.
Speaker 2 (12:13):
Interesting and you're working with some pretty
massive size businesses.
I would say you mentionedbefore we hit the recording on
average of 20 mil to 500 milrange, which is pretty big.
Speaker 1 (12:25):
Yes.
Speaker 2 (12:26):
I mean the range itself, but also to be making
half a billion dollars a year.
That's not a small company.
How do you find new clients towork with?
Because I'm guessing this isn'tfacebook ads, because you're
not.
You're not finding businessesthat large through, maybe, so
that's a good question.
Speaker 3 (12:42):
We answered that part first.
Um, businesses for the mostpart are not looking on facebook
for their for for vendors towork with.
Businesses may or may not belooking on Google AdWords.
Businesses may or may not belooking for LinkedIn ads, but I
find my leads because they'renot clients yet, they're
(13:04):
prospects.
They turn into leads that turninto clients and it's a big
funnel.
Many prospects turn into a verysmall list of actual clients
because not everybody believesthey need our services.
We could talk about that.
Prospects are not at alldifficult to find.
If you're a part of the businessand you have a passion for
manufacturing, or if you have apassion for automobiles, or if
(13:29):
you have a background inutilities, you know that space
and you know how to pull up alist of automobile dealerships.
Or you know how to pull up alist I mean I could do it right
now a list of orthopedicsurgeons, the top 100 orthopedic
surgeon practices in the UnitedStates.
It's easy to find thosebusinesses and more often than
not, it's easy to find thepeople that we reach out to the
(13:49):
most, which is typically the CFO.
The CFO is not looking for costreduction.
He knows who in hisorganization is looking for cost
reduction and beyond thebackground and looking for lists
driving down the street.
If you want to drive through anoffice park and one of our
services is small parcelshipping If you want to find
(14:12):
businesses that have large,small parcel shipping, if you
want to find businesses thathave large, small parcel
shipping expenses, just go intoan office park and look for
FedEx and UPS trucks.
If you want to find businessesthat have large waste expenses,
go into an office park to seewho has the waste vendors, the
green bins, the blue bins in theback of the malls.
Vendors the green bins, theblue bins in the back of the
(14:33):
malls.
It's go through a go through ashopping mall and there are
probably 50 brands there thatare manufacturers that have
manufacturing expenses, that areretailers that have retail
expenses and because of that andthese manufacturers are
shipping to probably 300 retaillocations they have FedEx and
(14:54):
UPS expenses.
So, okay, you know you got thebrand.
You go through the mall, youget 50, 100 of these brands and
now you go to their main websiteor any one of a number of tools
, find the CFO, find thepresident, find the chief
procurement officer or somebodyand try to make a connection.
No shortage of hundreds ofthousands of millions of
businesses out there that canuse cost reduction.
Speaker 2 (15:17):
It's very creative the way you're speaking about,
just like the signs to look forand, like you know, one plus one
equals two.
If you see this, then it meansthat and you keep going.
You mentioned again before wehit record that that a lot of
firms don't think they need costreduction but you guys come in
(15:38):
on a contingency basis.
Essentially, the offer is we'regoing to help you guys save a
ton of money and until we do,you don't pay us anything.
Who's saying no to that?
That sounds like a prettyno-brainer offer.
Speaker 3 (15:51):
The groups that say no to us initially, and
sometimes forever, are thosegroups that have financial
analysts, slash AP, slashprocurement teams that are
responsible for this.
And there's a perhapscontroversial opinion here, a
(16:11):
piece of a mindset, that I'mpaying.
I'm the CFO, I'm paying thisteam to do their job.
They're doing their job.
I'm paying them hundreds ofthousands, if not millions of
dollars to do the job.
Why do I need to bring you in?
They're doing their job.
So the question I ask the mostis how are they compensated for
their findings?
We're compensated dollar fordollar for everything we find.
(16:31):
If you said, if there's nofindings, there's no fee, and
the more findings, the more feefor us.
So are they being compensatedfor their findings?
Do they have a background?
Does your accounts payableperson that pays the waste bills
, utility bills?
Have they worked at WasteManagement or Public Services,
(16:54):
at&t, whatever your utilityservice is?
Do they know how to negotiateon their behalf?
Do they have the contract infront of them?
The contract is typically notwith AP.
The contract is with theprocurement team.
Sometimes the AP team has it.
Are they studying every invoiceto verify that the invoice is
contractually valid?
(17:15):
Do they have access to costlevel data.
So that's the argument we gothrough the conversation we go
through with the client, withthe CFO if they will have that
conversation with us at allabout why what they're doing is
not as effective as what we anda few other competitors can do.
(17:37):
Sometimes it comes back it's toogood to be true, or I'm not
willing to pay you 50% Again.
If you brought it down from$1,000 to $900, I could bring it
down to $500, saving you $400.
I'm not willing to pay you $200for saving that, but in the
meantime you're paying them $400.
(17:57):
You're paying them 100%indefinitely, but you only have
to pay us 50%, $200 for 36 or 60months.
There's two service levels.
We could talk about that.
Sometimes we're able toconvince them of that to move
forward with us.
Sometimes it's just you know weare the best negotiators in the
world.
There's nobody does about thisthat clients.
(18:18):
This is how I hear the argumentcoming back from clients.
We know how to negotiate.
This is what we do for a living.
Um, we already have the bestrates.
Speaker 2 (18:26):
I've been doing this for 30 years, probably not yeah,
it sounds like there's probablya bit of ego at play, which, to
a certain degree, could be fair.
I mean, like you said, wealready have a full team in
place.
We're paying.
Maybe you don't even want thatlike the curtain to be revealed
of oh my goodness, I've beenpaying this much money to people
(18:47):
and they haven't been doingtheir job, so we know that we
don't.
Speaker 3 (18:53):
You and I had a pre-interview.
For any of us listening to this.
I did not say the word ego toyou, but that is the word that
is what I use when I talk to mypeers.
There's an ego involved,Whether our clients want to
admit it or not.
My feeling is that more oftenthan not, ego gets in the way of
doing the right thing for thebusiness.
In some cases, there areemployees that don't have a
(19:14):
vested interest in the business.
That's why I reach out to theCFO or the president or somebody
that's been installed with afair amount of equity in the
business.
I get the sense.
This is true also when I'mdealing with government
organizations.
It's not my money, it'staxpayer money, so it's fine.
Well, I was recently dealing alittle bit of a sore point with
(19:37):
myself.
I was recently dealing with avery large government-related
organization paying I'll try tobe a little vague $3 million a
year for a service that we feltcomfortable.
We were able to renegotiate to20% or more cost reduction, and
even at 10% it's still a largewin for them and they moved
(19:59):
forward.
That's pretty far along thepath Reviewing our contract,
saying it's illegal.
But they chose to go anotherpath which is not going to be
anywhere near as effective, butit might have been easier.
There are options.
There are many options.
Clients can work with grouppurchasing organizations, gpos,
(20:22):
and sometimes they can negotiaterates on their own and they're
thinking that's easier.
In some cases go through a GPOor a pre-negotiated rate, state
level rate for services.
In most states, services forany government entity, whether
it be schools or the citygovernment for electricity, for
(20:44):
copiers, for cleaning, for anykind of services are negotiated
in advance.
So the particular entity canchoose to take that off the
shelf at that point quoteunquote discounted rate rather
than running their own RFP.
That is easier, for sure, thanrunning your own RFP, but we
could work with you to run thatRFP and taking it off off your
hands entirely and get you evena better rate 20, 10, 20, 30%.
(21:07):
And if you're talking about ifyou're talking about spending
only $50,000 or something,saving $500 is not worth
anybody's time.
But if you're spending 3million a year and I could save
you three hundred thousand ormore, yeah, that to me seems
like a large amount of money.
Speaker 2 (21:26):
but when you're dealing with an umpteen billion
dollar entity, um, and it's notmy money, it's not their money
and they're not equity in thebusiness.
Speaker 3 (21:31):
It's a challenge, so you hit a little bit of a nerve
there, but that's.
I'm glad I actually put it outthere that's good.
Speaker 2 (21:38):
Good, that's good.
Okay, so last question for you,larry, and probably maybe a
tricky one to answer, but anactionable step somebody could
take to one start going to theirvendors, whatever the size of
the company is.
But maybe a piece of advice totip the scales in their favor on
(22:00):
the negotiating side of thingswell, I was going to say this
before.
Speaker 3 (22:03):
So I mentioned by saying I'm.
We started by talking about the20 million to 50 million a
million dollar business.
Far below 20 million dollarsthey're not.
The business is not spendingenough for us to get engaged and
we're not going to spend thetime.
We have minimums on each of ourcategories.
But the business themselvesshould go back to the vendors.
And I mean, even if they'respending $500 a year, the vendor
(22:24):
doesn't really know room.
But if they're spending a fewthousand dollars a year for
waste services, for uniforms,linens, but which may be, but
they may be below a service, askit doesn't have to ask.
Ask for ask it doesn't have toask.
Ask for 20% discount inexchange for renegotiating a
five-year contract.
(22:44):
Be on top of your invoice.
Sometimes you just don't havethe background, as I mentioned,
to know what should be on theinvoice, what should be on the
contract or not.
But the businesses that arelarger, they often don't have
the time.
They're running their business.
They're probably.
You know, in today's economymore and more businesses are
trying to do more with less andthey just don't have the time to
(23:06):
worry about midline expenses.
If they do, if they do have thetime, do what I suggested about
the small businesses Study upon what the rates are.
If you can Study up on whatyour contract looks like on what
the rates are, if you can studyup on what your contract looks
like, educate the AP team to belooking at the invoices in the
contract to verify that in fact,what they're being invoiced for
is correct, and then, of course, as I mentioned, try to
(23:27):
renegotiate rates.
You may get a few points off ofthat.
If you can't or you don't havethe time, here I am.
Speaker 2 (23:34):
Perfect, that's what a great close.
How can people get in touchwith you then to continue this
conversation?
Sure I'm assuming you'll putsomething at the bottom of the
(23:56):
screen that gives myconversation get in touch with
you and hopefully save a ton ofmoney.
Larry, thank you so much forcoming on and sharing all this.
There's so much knowledge andvalue here and it's motivated me
to go look at where ourexpenses are and try to shave
off a couple of bucks here andthere for the exact same thing
you're already getting.
Speaker 3 (24:15):
I'll go as far as to say and feel free to edit this
out that if you can refer anybusiness to me, or anybody here
can refer any business to me,I'd be more than happy to pay
referral fees.
So, even if you don't have thebusiness and the expenses
directly, if you know people whodo and can make these
introductions and I can helpthem, I'll help you as well.
Speaker 2 (24:31):
There we go.
If that's not enough of areason to reach out to Larry, I
don't know what is.
Larry, thanks again for comingon.
I really appreciate it.
Speaker 3 (24:38):
Thanks, James.
I appreciate the time.
Thank you.
Speaker 4 (24:40):
Thanks for tuning in to this episode of CFO
Chronicles the secrets behindsuccess.
I hope you found value intoday's conversation.
As we wrap up, I'd love for youto do two things.
First, make sure to subscribeto this podcast so you don't
miss any future episodes.
If you enjoyed today'sdiscussion, please rate and
review the show.
It helps others discover theinsights we share here.
(25:04):
Second, if you're ready to takeyour business to the next level
and attract the high-endclients you deserve, head over
to accountingleadsnowcom orclick the link in the show notes
to book your strategy.
Call.
It's time to position yourselfas the advisor your clients need
.
And don't forget you canconnect with me on LinkedIn to
stay up to date on what'shappening in the world of
accounting and financial growth.
We've got more exciting topicscoming up, so stay tuned for the
next episode of CFO Chronicles.
(25:25):
Until then, keep pushingforward.
Your growth is just onestrategic move away.
Speaker 1 (25:31):
Thanks for listening to CFO Chronicles the secrets
behind success.
We hope today's episodeprovided valuable strategies to
help you attract morehigh-paying clients.
Be sure to subscribe, followand share with fellow
professionals.
Connect with us on LinkedIn andleave a review or comment to
join the conversation.
Your feedback helps us bringyou the best insights in finance
(25:54):
and marketing.
Until next time, keep strivingfor success and unlocking your
business's potential.
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