Avoiding False Economies

Everyone wants to save money – that is a given. Beware falling victim to false economy however. You do not want to save money in one area of your business only to have that savings cost you more in another. The classic example of this is driving across town to save a few cents on gas. Yes, you saved seventy-five cents on the gas you bought, but you used a dollar’s worth of gas to do so. What you have is a net loss.

false economySometimes in business the cause and effect of expenditures are not as direct as buying gas, but they are still there. For instance, many small businesses are tempted to use the least expensive phone service available. The problem is that an undependable phone connection can cause you frustration, lost customers, and give your business a poor reputation. All it takes is one or two clients turning away from you because you are hard to get hold of or the connection is always scratchy to more than offset that savings you gained by using a cheap service.

Another example is the purchase of equipment such as computers, faxes, or printers. Too often the price of the machine is the overriding factor in what is bought. What is left out many times is the needs assessment. If you invest in a new computer without looking at the requirements to run your software, the environment that it will be running in, the number of users it will have, the expected life-span and so on, you will end up either having to buy additional equipment or you will find your operations hampered. If processes take too long to complete, can’t be done, or must be out-sourced, this can result in lost customers, employee frustration, and direct additional expenses.

Finally, and an often neglected area, is training. When you or someone on your staff is not up-to-speed on the software you are using, tasks take longer, errors are introduced, and poor job satisfaction follows which can result in turn-over and poor customer service. Sure training costs money, but I have seen many an example where simply taking a one day class would give a person skills that enable them to shave hours per week off their work. Those hours can be spent doing additional work, building strong customer relationships, or even just enjoying life! Here, a class that cost perhaps two-hundred dollars can pay for itself in time and productivity within a few months. In more than one case I have seen days cut off monthly procedures and outsourced functions brought easily back in-house.

The key to all of these is to think beyond the immediate outlay of cash to what that purchase is really providing to your business. Every expenditure you make is an investment for your business. If using a cheaper alternative costs you even one sale, is it worth it? In some cases the answer may be yes. But in other cases, when you really look at how much it costs you to drive across town for that gas, the more expensive option may be the one that provides the greatest return.

Saving Money in the Office

Want to put some extra money in your pocket? As Benjamin Franklin said, “a penny saved is a penny earned.” In these tough economic times it behooves us all to look at what we are spending money on and cut back where appropriate. Not only will that help the bottom line, but it will free up some of the cash you may need for areas that need bolstering such as web marketing, employee benefits, or computer service.

To that end here are nine simple things that will cost you little or nothing that can net you some significant returns in the long run.

  1. Cleaning – What does cleaning have to do with saving money? Other than age and power surges, the biggest killer of computers and printers that I have seen is heat. That heat is caused by the ventilation being blocked by dust, pet hair, or other debris. Once every few months take the time to make sure the fans and vents on your computer, monitor, and printer are unobstructed. If you keep your equipment clean it will run cooler and therefor last longer. And the longer it lasts the less often you have to pay to replace it – or pay for someone like me to come fix it.
  2. Faxing – Not sure if you want to buy a fax machine or replace that old one? Well don’t! Most companies are using email not fax these days, and those that aren’t should be. Not only are emails easier to keep track of but they save time and paper. But what if you need to send a fax? Go down to your local office supply store and they will charge you a small sum to send it, or you could just do it from your computer. Online services like FaxZero.com will let you send small faxes for free and longer faxes for a minimal fee. So there is absolutely no reason to have that expensive fax machine sitting around gobbling up power.
  3. Electricity – And while we are talking about power, let’s talk about all those cell phone chargers, sleeping printers, and other dormant equipment you have around. Each of those devices is drawing current even when you are not using it. How can you tell? Is the little light on? Are they warm? Is that power brick humming? Then it is drawing power. If you aren’t going to be using the device for a while, then unplug it entirely. Or just plug them into a power strip and turn that single power strip switch off. Not only will you be saving electricity, but you will be adding extra insurance against power surges and voltage shocks.
  4. Upgrading Software – About to upgrade to the newest version of Microsoft Office? Ask yourself, “Why?” If the current version is serving you fine now, what feature is it that you are paying for? If it is just to get compatibility with the new file formats, consider downloading the Microsoft Office Compatibility Pack for Word, Excel, and PowerPoint 2007 File Formats. With it you can open, edit and save documents, workbooks and presentations in the file formats new to Microsoft Office Word, Excel and PowerPoint 2007. With other software, ask the same questions – “why am I upgrading this” and “is there a free update or patch that will let me do most of those same things?”
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