Sure it sounds silly, but it worked because you clicked in and are reading. So keep going. Everyone’s checkbook leaks a little; some more than others. We all see the big bills, the ones that stand out, but it is the little bills that drip, drip, drip into your expenses that need your attention.
First of all, if you sign all the checks yourself, or if you approve every check, skip this paragraph. If you are still reading, you should see every invoice your company pays. No single act can reduce your expenses as greatly as this. Don’t tell me you don’t have time. Delegate some other task and take on this one, at least for three months. Most companies spend thousands of dollars in a current year, because they spent it last year. Question every expense to see if it makes sense in your current business plan.
Use a best-case scenario and a worst-case scenario. If the expense can really help your company, do it. If the expense is cut out, will your company be deeply hurt? If not, cut the expense.
You will be surprised at what are apparently normal expenses that you can do without. In how many different places do you advertise? In today’s economy, you need to have a good, if not great, website; you need a good, maybe a bit smaller than you are used to, yellow pages ad and an approach to advertising that unifies all of your other expenditures. Do you need to be in every local newspaper? Every radio station? Maybe yes, based on your geography, but look carefully here.
Drop memberships in organizations where you don’t attend meetings anymore. Are you paying for magazines for your showroom that have an ad for your competitors? Drop those now! Check your phone bill and utilities to see if you are in the correct rate class. Combine multiple fax machines into one or two phone lines at most. Everyone doesn’t need a fax right at their desk. Check your service contracts for office equipment. You may be paying more per year for printer repair contracts than it costs to buy a new one! Are you paying for software updates for programs you no longer use? You will only see this when you look at the bills yourself.
Cut out unnecessary travel. Write a letter or use the phone to talk on rather than as a text tool. Unnecessary travel not only costs you outgoing dollars, but wastes employee time, the most valuable asset you have.
Make sure your employees write the cost of what they are buying on your purchase order before they buy the goods. Often times they will just fill in the price after the invoice arrives. Negotiate pricing before you buy. Cut down on your number of vendors. You’ll have more clout with fewer vendors which will earn you better pricing and give you less overhead in paying bills.
Pay the vendors that give a cash discount before the ones that don’t. One percent here and there adds up.
I worked for a fabrictor that employed over 200 people. Either the owner, Chuck, or I signed every single check that went out of the building. We knew exactly what was going on and this helped our business succeed.
(Paul’s note…I’ll be at the Atlanta GlassBuild event when you read this. Over the next couple of weeks you’ll get my thoughts on the products and ideas on display. I hope I will meet many of you there. Please drop in at the USGlass booth, number 708).