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Creative solutions for tough times.

Just as association members have learned to live in a tougher economic environment, associations themselves have learned to do so as well. Even as the economy improves, however, many associations must struggle to catch up.

Some will be driven out of business; others may lose their identity as they pursue mergers or become managed by a multimanagement firm. The best and the brightest associations, however, will use every good idea they can find to serve their members and succeed.

Association managers can achieve a great deal simply by looking at operations from a fresh perspective. The greatest opportunities to raise revenues and cut costs will be achieved by examining programs. Programs become outdated over time; tremendous savings can be achieved by eliminating those that are outdated. Similarly, every association's members have needs that are not being met. Providing new programs to successfully fill members' needs is the best possible way for an association to enhance its revenue.

Operational efficiency offers another important area for cutting costs and improving service. Computer use patterns often offer a classic example of operational inefficiency. Many computers can provide much more than they do; additional reports are available if people would ask for them. In other cases, too much data is provided and often important material is missed. Occasionally, computers provide the wrong kind of data completely.

Experienced operational auditors looking to improve efficiency will look not only at such areas as the computer system and purchasing (almost always an area ripe with opportunity) but also at how the parts of the association interact with each other.

Many specific opportunities for increasing revenue and decreasing costs are generic enough to be useful to almost all associations. A few of these are provided in the following list. Many of the ideas proposed may not be politically acceptable for your association, but I hope that at least a few will not only be acceptable but useful.

Increasing revenues

1. Accept credit card payments and encourage your members to pay by credit card.

2. Obtain sponsors for all meetings and conventions, including the conference or meeting itself, meals or events, handouts, and anything else you can think of.

3. Actively market your membership lists.

4. Offer audio-conference programs as one way to enhance your service to members who can't attend in person.

5. Use your expositions and seminars as forums for effectively promoting and selling your publications, products, and services.

6. Sell surplus fixed assets.

7. Rent out your association's excess building space and unused equipment.

8. Sell your consulting services to members or other associations.

9. Institute an aggressive membership campaign, staffed by commission-only workers or, better yet, by volunteer members.

10. Market your products aggressively. For example, in each product being shipped, include a brochure or advertisement about a related product.

11. Sell advertising in all your publications, including journals, convention programs, and exhibit planners.

12. Enlist well-known members to endorse your products to widen their acceptance.

13. Offer your staff a percentage of new income from nondues sources as an incentive.

14. Permit exhibitors to purchase space to market products or services.

Changing products and pricing

15. Re-evaluate your members' needs, expectations, and preferences. Ask yourself: Would new or different products work better? Should programs operating at a loss be dropped?

16. Prioritize all of your programs and identify your core and non-core programs. See if any non-core items can be eliminated while maintaining essential services.

17. Unbundle services and products and charge the users a separate, additional amount for each.

18. Review and update your fees and charges, including membership, program, product, and publication fees.

19. Offer unemployed members reduced membership fees.

20. Set member and nonmember fees at your programs to encourage nonmembers to join.

21. Create new certification programs.

22. Offer courses or publications as a series to sell more units. Similarly, assemble several products and offer the package at a discount.

23. Charge for products you now offer for free.

24. Develop a customer services group to answer incoming calls, reduce callbacks, and fill orders.

25. Provide no-frills seminars.

Improving financing

26. Increase your lines of credit before you need them. Then use your line of credit for short-term needs instead of liquidating income-producing assets.

27. Ask your vendors to carry your receivable.

28. Create new funds, such as a founders or endowment fund, to cover the cost of existing programs into the future.

29. Ask your members for loans, either long-term loans to invest in the future or short-term "bridge" loans. Offer them interest that is competitive but less than you would have to pay a bank.

30. Buy a building while prices and interest rates are low.

31. Negotiate the lowest discount rates for charge card purchases.

32. Arrange deferred compensation for highly paid executives.

33. Use a certificate of deposit buying service.

34. Review your banking relationships and negotiate better ones.

Improving cash flow

35. Make as many sales as you can with payment collected in advance.

36. Improve your collection procedures: Make sure statements go out monthly. Hand-write notes on statements politely asking for payment by a specific date and personally call all accounts due more than 60 days. Hire a collection agency. Enforce fees on late payments.

37. Use Automatic Clearing House (ACH) payments for regular cash receipts such as dues. Members tend to keep paying--reducing collection costs and delinquencies--and bank processing fees are less for ACH receipts.

38. Prepare a realistic budget and have your staff integrate it with monthly cash flow statements.

39. Take advantage of vendor discounts and negotiate for discounts in exchange for prompt payment.

40. Keep accurate financial records and compare your monthly financial reports with your budget.

41. Request that staff notify you beforehand if they anticipate going over budget.

42. Make sure the person reviewing financial transactions is focused on the good of the association.

43. Invoice members 60 and 30 days before their anniversary dates.

44. Make bank deposits daily.

45. Make sure you are getting the best return on all your money--including your daily cash float.

46. Use a lockbox to expedite processing cash receipts.

47. Negotiate a target balance with the bank to reduce lockbox fees.

48. Process credit card payments electronically.

Cutting costs

49. Eliminate department boundaries. Think in terms of tasks or activities, and encourage your staff to work as a team.

50. Review your most common activities and find ways to do them for less. Challenge your staff to come up with ideas.

51. Focus more on training and less on fixing repetitive problems.

52. Develop budgets and target goals for every area where you are trying to lower costs.

53. Make a challenge out of saving money. When the staff realizes that making the payroll comes first and everyone has to help, you'll be surprised how much help is offered.

54. Discontinue staff parties and social events.

55. Shred paper in lieu of plastic foam for shipping and packing.

56. Determine if equipment upgrades are justified by potential cost savings or increased revenues.

57. Bring training in-house if your group is large enough.

58. Decide if all subgroups of membership need to be served.

59. Implement a cash award system for successful cost-saving suggestions.

60. Ask your board members for suggestions on how to cut costs.

61. Never pay full price for anything.

62. Ask your membership for donations of in-kind services (printing, legal, accounting, etc.) or needed equipment, furniture, or supplies.

Salaries and benefits:

63. Reducing staff size could leave the organization dangerously understaffed. Instead, increase productivity by using staff more efficiently.

64. Assess staff by ability and not by title or department. Take advantage of each person's strengths.

65. Analyze your staff's daily routines and eliminate unnecessary tasks. Concentrate your staff's energy on key services and revenue-producing activities.

66. Pay overtime to existing staff instead of hiring temporary help.

67. Use interns or volunteers to perform clerical and other simple tasks.

68. During peak times, hire students to help.

69. Contract out functions like payroll and bulk mailing to services that can do them for less.

70. Introduce direct-deposit payroll checks, saving staff trips to the bank.

71. Review employee benefits and comparatively shop for those you must keep. Reduce benefits where you can (e.g., raise the medical deductible).

72. Offer furloughs as an opportunity if things get tough. Some staff may be eager to take time off without pay.

73. Substitute comp time for overtime when possible; be careful to follow the rules.

74. Offer early retirements.

75. Change your workweek from 37.5 to 40 hours.

76. Reduce positions to less than full time.

77. Advertise employment opportunities in local newspapers instead of through employment agencies.

78. Close on Fridays in your slow season.

79. Reduce the number of paid holidays.


80. Work cooperatively with all suppliers to keep costs down; let them know you will stick with them if they help you.

81. Renegotiate prices with existing vendors and seek competitive bids on all future expenditures. Conduct annual or biannual reviews of your major vendors.

82. Form a purchasing group with other associations.

83. Have your executive director or vice president approve all staff subscriptions and memberships.

84. Join a buying club for office supplies and printing services.

85. Centralize purchasing responsibilities.

86. Review service contracts.

87. Consult with staff before you make major purchases. Buying equipment that does more than you really need can be expensive, and buying equipment that does less can be disastrous.

Occupancy costs:

88. Downsize office space by using off-site storage.

89. Realize savings by moving your association to the suburbs or to a less expensive building.

90. Review your facility operations and management.

91. Remind staff of heating and air conditioning costs and urge them to keep their windows closed.

92. Renegotiate your rent.

93. Conduct an energy audit.


94. Create promotional flyers and program books in house with desktop publishing.

95. Use conference calls instead of traveling.

96. Use second-day mail instead of overnight.

97. Combine mailings when possible.

98. Change your long-distance telephone carrier to a regional carrier.

99. Set up telephone rules and urge that staff keep calls short. If possible, have your phone system keep a log of staff long-distance calls.

100. Respond to requests the first time to avoid callbacks.

101. Use faxes instead of messengers whenever you can.

102. Make sure no personal mail is being passed through your postage meter.

103. Use third-class bulk postage instead of first class where practical.

104. If you are a 501(c)(6) professional society involved in educational activities, create a 501(c)(3) organization to receive lower postage rates.

105. Use mailroom personnel to do duplicating.

106. Reduce the paper weight of your publication.


107. Take advantage of lowered Saturday night airfares.

108. Eliminate room service and movies, and set maximum reimbursements for on-site meals.

109. Have all speakers arrange their travel through your travel agency and clarify which expenses will not be reimbursed.

110. Eliminate nonessential travel.


111. Shop for better, less-expensive health, disability, and other insurance.

112. Increase insurance deductibles, especially fire and theft.

113. Self-insure your dental plan, or don't offer a dental program at all.

114. Self-fund for workers' comp and group coverage offered through membership organizations.


115. Be a frank and tough negotiator with hotels and conference centers.

116. Review menus to provide lighter, less expensive meals.

117. Use convention service bureaus to find the right facility quickly.

118. Hold small meetings in your own conference facilities. Use a local caterer or carryout.

119. Have officers or board members pay their own costs to attend meetings.

120. Use a cash bar at meetings.

Andrew S. Lang is president and chief executive officer of Lang + Associates, P.A., a certified public accounting and consulting firm in Bethesda, Maryland.

Several people contributed ideas to this list. Special credit belongs to Malcolm Karl, vice president, finance, at ASAE, for his extensive list and to Glenn Tecker, president and chief executive officer of Glenn H. Tecker and Associates, Trenton, New Jersey, for his valuable perspective. Thanks also to Russ Abolt, executive vice president, International Sleep Products Association, Alexandria, Virginia; John H. Buck, executive director, Citizens' Goals, Colorado Springs, Colorado; James Caputo, vice president and chief financial officer, American Council on Education, Washington, D.C.; Amy Chang, assistant director, education and training, American Society for Microbiology, Washington, D.C.; Cort Durocher, executive director, American Institute of Aeronautics and Astronautics, Washington, D.C.; Larry Merrill, deputy executive director, Michigan Township Association, Lansing, Michigan; David Smith, senior vice president, First National Bank of Maryland, Washington, D.C.; and Kevin A. Wohlfort, accounting supervisor, American Urological Association, Baltimore.

If you have ideas you think might help other associations, fax your ideas to us using our convenient "Instant Factsback," page 26.
COPYRIGHT 1993 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:ways by which association managers can increase revenue and decrease costs
Author:Lang, Andrew S.
Publication:Association Management
Date:Mar 1, 1993
Previous Article:Defining members' international needs.
Next Article:Establishing a marketing function.

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