Business Lunch with Roland Frasier
Episode: From Cash Crunch to Cash Flow: Expense Optimization Tactics
Date: August 20, 2025
Host: Roland Frasier
Guest: Richard Lindner

Episode Overview

This episode dives deep into practical strategies for improving business cash flow by optimizing expenses, especially during periods of stalled sales. Roland Frasier and Richard Lindner outline the frameworks and tactics they personally used to uncover over $1 million in annual savings across their companies, and share actionable advice for listeners to apply in their own businesses—whether they're facing a crunch or aiming to maximize profitability.

Key Discussion Points & Insights

1. The Sales Stagnation Dilemma and Payment Terms

• [02:21] Richard shares that sales had stalled in two companies, prompting reviews of product, process, and price.
• Instead of lowering prices, they focused on payment terms—specifically, allowing customers to pay over 12 months rather than upfront.
• Result:
  • One brand saw doubling of sales velocity; another saw tripling.
  • However, cash flow dropped significantly due to payments being spread over a year.

"It's kind of this really weird feeling of like yay, aww, we're winning. But at the same time, we're watching our cash position... business that's in a cash flow crunch. So what do you do?"
— Richard Lindner [04:06]

• Advise testing 3, 6, and 9 payment options if 12 is too aggressive, to balance cash and sales velocity ([05:11]).

2. Understanding the Lag with GAAP Revenue Recognition

• [06:24] Roland highlights an important consideration: when using generally accepted accounting principles (GAAP), revenue is recognized over the service period, not upfront.
• Impact: P&L may look weak even as customer sales increase, complicating preparations for potential sale of the business.

3. The "STOP" Framework for Expense Categories

Richard introduces STOP—the four main areas to analyze for cost optimization:

• S: Staffing & People (including employees and contractors/agencies)
• T: Tech & Tools (subscriptions, platforms, software)
• O: Operations & Overhead (facilities, utilities, leases, insurance)
• P: Purchases & Procurement (raw materials, inventory, vendor contracts)

"Every business doesn't have expenses, every business has investments."
— Richard Lindner [13:23]

a) Staff and People

• Start by identifying roles that would NOT be rehired today ([09:16]).
• Analyze departmental scorecards to spot underperformance and low ROI, especially for high-paid roles.
• Evaluate roles that could be replaced by automation or AI advancements ([10:30], [15:06]).
• Example: Office managers post-COVID after going remote ([12:05])—if the function/business environment has changed, acknowledge "nice-to-haves" versus essentials.

b) Tech and Tools

• Profit “dies by a thousand cuts” via forgotten/unused subscriptions ([15:39]).
• Review both P&L and credit card statements for recurring expenses ([16:43]).
• Look for both tool cancellations (completely unused) and reductions (downgrade to a lower usage tier).
• Example: Downgraded a $1,000/month SaaS to $120/month saving $780 instantly ([17:32]).

"We saved, you know, $40,000 a month... in the cancellation, the reduction of tools and technology that again, had no effect on our ability to fulfill our products and service"
— Richard Lindner [18:28]

c) Operations & Overhead

• Review rents, leases, utilities, insurance, and renegotiate when possible especially if the market has shifted ([19:00]).
• Canceled high-priced fiber internet for better, cheaper service, saving ~$1,900/month ([19:12]).

d) Purchases & Procurement

• Explore better terms or renegotiate with vendors, suppliers, and on major cost centers (media spend, raw materials).
• Example: Shifted media spend to a new card yielding 5% cashback instead of 1% ([25:23]).

4. Deep Dive: The "SAVE" Process (How To Make Cuts)

Richard introduces the SAVE acronym as the step-by-step method to execute cost reductions:

• S: Scan – Build a comprehensive list of all expenses, categorized, with separation difficulty rated ([27:04]).
• A: Analyze – Evaluate usage and impact; seek low-hanging fruit ready for immediate elimination/reduction ([27:47]).
• V: Verify – Involve department heads/leaders to confirm criticality, review for alternatives ([30:41]).
• E: Execute – Plan and implement eliminations or reductions promptly; projects that require migrations/phasing get a longer timeline ([31:46]).

"When we do business with the unemotional aspect of the cost versus the, the return, you have to look at that and you have to say unemotionally, is there an ROI here?"
— Roland Frasier [29:17]

"If you're operating on a 25% profit margin and you cut $100,000 out of your net bottom line, that's the equivalent of increasing not just sales, but collected revenue, $400,000 a month."
— Richard Lindner [35:34]

5. The Power of Continuous Review

• Suggest running the STOP and SAVE process quarterly, especially for tools and overhead—even when things are good ([35:01], [36:15]).
• Cutting $100K/month equates to an $8.4M increase in company value at a 7x multiple ([33:55]).
• Get in the habit so that expense discipline works in both good and challenging times.

"The tendency is going to be to do this when things are bad... I would challenge people, if things are really good right now, definitely do this anyway. Don't wait for things to get bad to make things better."
— Richard Lindner [36:10]

Notable Quotes & Memorable Moments

• On emotional attachment and business decisions:

  "These are human beings... but if we're being honest, we don't, we can't, we can't keep that role."
  — Richard Lindner [12:26]

• On tools eating profits:

  "Profit dies by a thousand cuts."
  — Richard Lindner [15:46]

• On the need for recurring discipline:

  "It works so well, we stopped doing it."
  — Richard Lindner [18:14] (on quarterly cost reviews)

• On translating savings to enterprise value:

  "$100,000 a month... at a seven multiple, that makes the business worth $8.4 million more."
  — Roland Frasier [33:55]

Timestamps for Key Segments

| Timestamp | Segment | |-----------|------------------------------------------| | 02:21 | Why & how payment terms optimization was tested | | 03:39 | Impact of 12-pay option on sales velocity & cash | | 06:24 | Revenue recognition challenges with GAAP | | 08:25 | Introduction of the STOP expense categories | | 09:16 | Staff/People analysis—roles, scorecards, automation| | 15:39 | Tech/Tools—subscription review techniques | | 18:28 | Quantified savings from tool cancellations/reductions| | 19:00 | Operations & Overhead—facility/utilities savings | | 23:09 | Purchases/Procurement—renegotiation and process change examples| | 25:23 | Media spend optimization—credit card rewards | | 27:04 | SAVE process—how to scan, analyze, verify, execute| | 29:17 | Value of analytics-driven, unemotional cost review| | 33:55 | Turned cost savings into increased business value | | 36:15 | Final advice: Review costs even when times are good|

Process Cheat Sheet

STOP: Where to Look for Expense Reduction

• Staffing & People
• Tech & Tools
• Operations & Overhead
• Procurement & Purchases

SAVE: How to Reduce Expenses

• Scan (list all expenses, rate impact/separation difficulty)
• Analyze (usage, ROI, low-hanging fruit)
• Verify (ownership/buy-in, alternatives, cross-check)
• Execute (plan/act—immediate cuts first, phased next)

Final Takeaways

• Proactively review expenses—don't wait for a crisis.
• Balance sales and cash flow when adjusting payment terms.
• Quarterly reviews help prevent expense creep.
• Small savings compound to make a massive difference—straight to the bottom line and company value.