“Preaching Prudence Creatively”

Another way to get employees to understand your cost structure is to make a game of it like Jay Goltz has.

Founder of Artists’ Frame Service, a Chicago-based company generating more than $10 million in annual sales, Goltz created a dynamic demonstration — "Showing Where the Money Goes." His goals: Make it clear just how expensive running a business is, and inspire employees to hold down costs.

A manager plays a customer with a $100 framing job. Using oversized money for easy visibility, the "customer" pays dollar by dollar as Goltz details each expense for the order: advertising, marketing, workers’ comp, materials, salaries. At the end, only $4 or $5 remains before taxes. The final profit is only a buck or two.

Source: "The Street Smart Entrepreneur" by Jay Goltz, Addicus Books Inc., 1998.