The Biz of Pacelinebiz

Turning things on end to achieve results!

Posts Tagged ‘Cost savings

Don’t Call Us We’ll Call You

leave a comment »

Obsolete

Obsolete

No, I am not giving you the stiff arm. I am no longer in possession of a traditional land line telephone number.  As of early June I cut the cord to the land line and now we rely on our cell phones.  This move was made easier since our 2 year contract was up and in the past two years the cell phone reception has improved.

This elimination of a seldom used resource saved about $34 per month. This is not a large sum of money but why pay for something that provides no value?  The question you might ask is; what are we going to do with the $408 annual savings? Lucky for you I have a list!  Check it out below.

  • Pay for a modest a weekend getaway – the saving should cover the cost of a hotel for two nights and money for activities. I don’t have to add in dinner as a cost since we normally go out to eat on Friday and Saturday night.
  • Four new tires for one of our cars – not sexy but I would rather have fresh rubber on my ride than a useless land line that only gets calls from telemarketers.
  • Trick out my bike with lightweight wheels – replace MPH that is lost by aging with technology!
  • Drive 4,896 miles for “free” at $2.50 per gallon and at 30 MPG.
  • Buy about eight candy bars per week every year at $1 each. Not recommended but you COULD do it.
  • Sponsor a child overseas for $1 a day.
  • Contribute half of it to a good cause and use the rest to pay down debt.
  • Save the $34 each month at 4% and in 15 years you would have $8,367.10 to blow however you like.
  • Depending on your age, buy a term life insurance policy for $100,000 to $300,000 face value.
  • Get the neighbor kid to cut your grass every other week for six months. I like that idea!
  • Buy a chair for the living room that only you are allowed to sit in like Archie Bunker.
  • Buy a gift for your spouse and treat her like she deserves – unlike Archie Bunker.

Maybe you can find a way to save a few bucks each month and have fun deciding what to do with it. Have a great week.

Advertisements

Do These Five Things And See What Happens Next

leave a comment »

A Few Bright Ideas

A Few Bright Ideas

Today I am going to challenge business owners to break from the routine and see if a few actions can invigorate your business.   When was the last time you tried a new idea?  If you can’t remember then maybe things are getting stale at your company and a small shake up will make a big difference.  None of these suggestions are very difficult so the cost-benefit upside is large.

  1. Call your five best customers and thank them for their business, ask them if there is anything they would like you to do to make things better, then ask them if they can get back to you with a possible new customer they could refer. They get an opportunity to feel appreciated and it might open dialogue on an improvement that will retain or increase business and you might get a referral. The effect will also give them a sense of being a business partner with you and not view you only as a vendor or service provider.
  2. Take a troubled or low producing employee to lunch and give them a chance to open up with some non-threatening, open-ended questions about work. If there is not much revealed move on and ask about family or hobbies.  At a minimum they will feel a little more appreciated and will probably sense you care and that might be the start for communication to work on the problem.
  3. Take yourself to lunch. Clear your head;  go to a quiet place, a city park or wherever you can feel relaxed and then jot down 3 things that you would do to change your company if you could.  Think big and then take the ideas back and see if your employees or management team can figure out a way to make it happen even if scaled back.  A small percentage improvement is better than nothing and you had a nice lunch.
  4. Assemble your employees and ask them to submit one idea to save costs without hurting the customer experience, quality, sales or employee well-being. Offer rewards for the best three ideas based on their input.   Perhaps the value would be $100 for first place $50 for second place and $25 for third place.  The kicker would be to throw a party for everyone once the ideas were successfully implemented.  The extravagance could be dependent on the success of the savings.  Try a pizza lunch for modest success and a catered buffet for a big win.
  5. Survey employees about their one pet peeve at the company and do your best to eliminate the issue that comes up most frequently. I am thinking about something like moving to business casual all the time or even jeans all the time (with appropriate limits).  Maybe it is something like buying a coffee maker for the office.

I hope you take the challenge and try to make a difference.  You don’t have much to lose and a lot to win. Have a fun week!

Peanut Butter And Jelly…And Staples

leave a comment »

A winning combination

A winning combination

What do these have in common you ask?  Peanut butter and jelly are great combinations and Staples, the office supplies retailer, is using a combination to save on costs.  I wrote about this strategy in 2012 and you can read my thoughts by clicking here.  If you do not want to read my blog about this, I will summarize my suggestion and summarize the article that discusses Staples idea for cost savings.  If you want to read the full article, click here.

My suggestion was to combine resources or cost share.  I focused mainly on operating space for companies that did not compete and operated at different times of the day or year.  A few items I suggested were an ice cream shop sub-letting their space in the cooler months to a soup and warm beverage shop.   I also suggested a pizza shop and bakery could share space and operate throughout the day.  The bakery would be open for breakfast and lunch and then the pizza shop would take over until they turned it back over to the bakery.

Staples is doing a very similar thing to save on the cost of having too much retail space.  They are now beginning a test in the Boston area to partner with a company that offers work space for business owners who need a temporary office or to meet with a client on an occasional basis.  I suppose this can work at least to recoup the cost of excess retail space but a more complimentary relationship would save on cost and increase sales.  They could look for a relationship that would draw more traffic to the stores from customers who would buy more Staples products.  The people who need a virtual office on an occasional basis are probably not heavy users of office supplies since they tend to be solo-preneurs who can function most of the time from a home office.

I give Staples credit for making the effort even if they are late in recognizing the need and opportunity.  I wish them luck as e-commerce and the continuing trend toward digitization is shrinking the size of the office supplies market.

Have a great week.

End Of Year Thoughts

leave a comment »

Do more of this in 2016

Do more of this in 2016

Note: This is the last business blog of the year.  Next week will be a story of some recent light bulb issues.  After that, I will continue with tradition and have blogs with a Christmas theme for the next three weeks and will resume the normal schedule with a business topic on Monday January 4th. 

On the fifth Monday of November, and for the final business blog for 2015 I have a list of things that are on my mind as we enter the final weeks of the year.  Perhaps one may inspire you in some way.

  • Embracing change is the only thing you can do, resisting will eventually cost you.  Catching up isn’t as easy as you think.
  • Similar to embracing change, look for being different.  You can make good money doing what everyone else is doing.  You can make great money by doing it differently.
  • Stay current with your to do list.  It is always easier to do a little everyday than a lot in a rush.
  • Periodically question how you do things.  If you have a system, process or policy that does not contribute to quality, efficiency or making your product or service better consider changing it.  This does not apply to regulatory or compliance related tasks that are out of your control.
  • Don’t underestimate the human capital (people) you have in your company.  Foster a culture that all ideas are welcome from all people in all areas of your business.  Some of the best ideas come from unrelated areas because they are not operating in your paradigm but are already out of the box.
  • Make things as simple as possible. If it is simple then it is easier to learn, understand, replicate and change.  It is better to take time at the beginning to make a process or activity streamlined than it is fixing it after is established.

Have a great week.

Written by pacelinebiz

November 30, 2015 at 8:02 am

Business Lessons From Elephants And Mosquitoes

with one comment

Many Small Bites Can Take Big Toll

Many Small Bites Can Take Big Toll

I owe this topic partially to a mentor I had back when I was working for a CPA firm early in my career.  He used the example of the elephant and mosquito.  He asked me if I had ever been trampled by an elephant and of course the answer was no.  Then he asked if I was ever bitten by a mosquito and of course the answer was yes.  He then dropped the punch line.  He said; “that just goes to show you that it’s the small things that will get you.”

Let’s apply the lesson of elephants and mosquitoes to a business setting.  Large amounts of transactions or a large volume of activity can lead to a potential opportunity to save significant money.  In conjunction with the elephant and mosquito lesson my mentor also liked to say “the little things can add up to make a big difference.”

Let’s look at an example how little things can bite you by adding up to make a big difference.  Let’s assume a delivery company has 5 trucks and delivers 6 days a week.  That amounts to 300 delivery days per truck or a total of 1,500 delivery days.  If the company can find a way to save just 10 miles per day per truck they will save 15,000 miles traveled.  Big delivery trucks get about 8 miles per 1 gallon of fuel.  At 8 miles per gallon at $2.80 per gallon for diesel fuel cost, those 15,000 miles add up to a savings of $5,250 per year.  This savings is substantial – at just 10 miles per day per truck.  Keep in mind this savings is every year and right now diesel fuel at $2.80 is almost $1/gallon cheaper than average.

How do you save those 10 miles per truck?  This is where it gets interesting.  In the case I am speaking of it was a very low tech solution.  The delivery drivers were delivering in an established route in a local area and had gotten in a habit of returning back to the office for their lunch break.  On average it was about 5 miles each way from the delivery route back to the office.  It made sense after the savings was determined to stay out on the route until the truck was empty or at the end of the day whichever came first.  Most days the end of the day came first or was simultaneous to the truck emptying.

Route efficiency is extremely important for a delivery company and various software exists that can optimize daily deliveries.  These software options can also generate invoices and into the accounting software and save input time for clerical staff.  It is an investment that typically has a pay back of less than 2 years and should be considered if the current accounting software can easily be integrated.

I hope this example can lead you to discover where your little things are adding up to make a big difference that you can exploit to your advantage.  Have a great week hunting mosquitoes.

Written by pacelinebiz

May 4, 2015 at 8:01 am

Coming Soon To Your Local Fast Food Restaurant

leave a comment »

That was extra mayo and onions, right?

There has been much discussion lately for a push to increase the minimum wage to as much as $15 per hour. This is above wheat many people currently earn and would seem like a great idea if you were making less than $15 an hour. For this topic today I don’t want to argue for or against a $15 minimum wage rate. What I want to explore is what effect that would have on jobs that are paying at or slightly above the current federal minimum wage of $7.25.

Specifically, I have been wondering why quick service restaurants such as McDonald’s don’t already have cashiers at their restaurants replaced with a hand-held device that can take orders and process payments at the table where you will consume the food? Perhaps they can design a system that lets you do this once you are signed on to their Wi-Fi using your mobile device. That would be cool. They don’t even pay for technology they can piggy back on your smart phone, tablet or other connected device.

I can think of several advantages:

  • This will decrease order errors due to misunderstandings and will guarantee better attention to detail in placing the order. I say guarantee because I am sure you care more about your sandwich not having onions and mayo on it than the typical person taking your order in the current system.
  • I will no longer be fuming while I stand in line waiting for my food to arrive – hopefully without onions and mayo. I can relax at my table and talk trash with my companions or surf the web with blazing fast Wi-Fi on my smart phone. Before I know it my order is delivered by an employee and the only worry is that the guy who made my burger was able to keep onions and mayo off my burger. See, the new order system eliminates one level of possible error.
  • More efficient use of square footage in the restaurant. Restaurant designers will no longer have to devote an area for customers to stand in line and order/wait. Less waiting area means there can be a bigger area for people to dine. More revenue, same square footage is a nice equation. Maybe this will lead to lower costs to the consumer?
  • Less labor costs by eliminating slow, human order takers with the new, streamlined system. This would lead to lower costs to the consumer and perhaps extra dollars spent in R & D making products slathered with cheddar cheese and topped with bacon low-calorie AND healthy. Sounds like a win anyway you look at it.

If the labor costs went to $15 an hour I wonder if this might hasten the implementation of my great ideas? Probably not, I am just talking crazy. Have a good week

Written by pacelinebiz

September 29, 2014 at 8:01 am

Business Lessons Are Everywhere

leave a comment »

Slow But Steady Costs Time And Money

Slow But Steady Costs Time And Money

Today I write about another business lesson that played out in front of my eyes without even looking for it. I find that these are the best kind of lessons, if you can recognize them. As I was cutting my grass on Memorial Day weekend I noticed that my neighbor was getting his grass cut by a crew of two people with push lawn mowers. The whole time I was cutting my lawn I was thinking about this and decided it would be a worthy topic to write about.

The two-man crew took at least an hour to finish the job and I would estimate they could have cut that in half had they had a riding lawnmower. This problem was so basic that I had to stop and comment to my wife about it. Apparently the first problem they have is inadequate access to capital. This best thing they could do would be scrape together $500 and buy a used riding lawnmower. The pay back on this capital expenditure would be very fast.

Let’s look at the numbers. If they can cut an additional three lawns per day at $30 per lawn due to this equipment upgrade ($90 more per day) it would take about 6 days to recoup their initial investment. The extra cost of gas for the riding mower versus two push mowers is assumed to be negligible. They already had a pickup truck that would fit the riding mower as long as they could figure out how to build a ramp to load and unload it.

As I was running the numbers in my head while finishing up my lawn, I envisioned myself becoming an Angel investor for the company. I would buy the riding mower and the two-man crew would cut my grass until they satisfied their debt. It would only take about 17 weeks at $30 a week to complete the repayment. After the 17 weeks, the mower would be theirs with no interest charged. If they were able to find the additional three customers they would now have time for each day, the extra $90 daily revenue would amount to an astonishing $11,700 more in revenue during a 26 week mowing season.

I realize this is an extreme example, but can you take a similar step that will move your business to the next level? Business is risky and there is no such thing as a sure thing but risk does get rewarded. Perhaps it is time to step out and risk a little for a great potential reward. At one point you took a risk and started a business – where has that spirit gone?

Have a great week.

Written by pacelinebiz

July 7, 2014 at 8:01 am