Ways that you've saved money

[Jed]

I'm launching my optometry practice next month and being a new business, I'd obviously like to keep the costs down so I can reach the magic break-even point as soon as possible.

What I'd like to know is are there any reasonably simple, effective ways that people have found that have enabled them to reduce a business expense? Examples might be things like switching the phone system to VOIP, recycling printer cartridges, that kind of stuff.

Obviously not all methods will apply to all businesses but presumably there are some that apply quite broadly, and being a newbie I'd love to hear about them (and I assume others would too).

Edit - Sorry, I just found this thread Easy ways to save money on your business bills which I somehow missed on my first search. It does however tend to focus mainly on electricity costs.

[abacus]

Hi Jed and welcome to the forum.

I am proud to say i am the biggest tightwad around both in our personal budget and in the business budget.

How to save money is resonably easy.....NEVER pay full price for ANTHING.
Sure it means doing a little research and a LOT of people say "Oh but my time is worth $X per hour it is not worth the time to chase 50c" but in the beginning of a business I am sure you will not be busy for a full 40hours every week. So use that time.

Things I have saved money on:
I bought my entire office(desk, chairs, bookcases carpet) 2nd hand (EBay local paper etc) Even the paint for the walls was scrounged from anybody we knew who had scraps of white paint hanging around.

Hubby built benches and racks for the factory himself and sourced timber from suppliers throwaways. (Aluminium comes in 6m wooden crates made of good enough pine )

I use Vistaprint for marketing materials. Great for testing campaigns because you can get small amounts of material FREE etc I get DL sized cards in lots of 100 free.

I regulary keep an eye on phone/internet plans (Am in the middle of researching now) for the best deals.

I use forums like this for networking. LOTS of great ideas free.


I could probably list loads more if I thought about it.

Just remember that for every $1 you spend it costs you $X in turnover.
THIS is the biggest difference between business saving and personal saving.
To save $10 when you are an employee you save saved $10 (maybe 20 minutes work) BUT in business to spend $10 cash means you have to have turned over $100-$200 depending on your NETT profit. (10% nett profit means $10 is worth around $100 in sales)......work out YOUR profit and start valueing every $ as the true multiple of it.........starts making the $4 daily coffee REALLY expensive

[Steve_Minshall]

First I would re-iterate what abacus said about multiplying every expense by 10 to convert an expense to sales required to cover it. I had a boss ram this home 10 years ago and I have found it really useful as an employee managing budgets and as a business owner. I make sure my employees are aware of it as well. It really puts expenditure and losses into perspective and makes you really need stuff before spending.

The other question I ask my self is how much does the customer care about this. In your case how much does the customer care about what you spend on the fit out of your premises? Well quite a lot, they will expect an optometry practice to look clean, tidy and professional so it is worth spending up on quality equipment and fittings. However, how much does your customer care about your personal office that they will not go in to? Not much, so second hand desks and book-shelfs there then.

So for every expense multiply by 10 then ask how much your customer will care about it.

Specific recommendations: make sure on your merchant services you are charged a flat fee per transaction for debit cards not as a percentage. Shop around on your merchant services you may find some big savings because a fraction of a % on practically every sale will add up.

Rent is a big expense, don't be backwards in asking for a free period to get established or anything else you can think of that will help out.

Think really hard about your advertising you can chew through thousands to learn what works and what does not. I wrote about my early experiences and the money I wasted a while back: What are the biggest issues starting a business

Review your expenses every year. This year we had it a bit tough because we opened a new shop and invested lots of cash so profits were way down. This was actually really good because it made me take a long hard look at expenses. What we did:

Went into the bank a told them I thought I was paying too much for merchant services and asked how to get it reviewed. I left some details and ten minutes later I had a telephone call telling me they had reviewed my charges which would save me about $8k a year. It was really that easy.

After starting a thread and consulting with the good folks on FS I cut back on YP online to save $3k without loss of sales.

I took back my online advertising from an outsourced solution which is saving me about 15% on cost-per-click.

We started a record book on everything that goes wrong that causes inconvenience, lost time or cost.This was just a line or two about what happened, what was the cost to us, what was the impact on the customer and what we did about it. This gave mistakes an actual acknowledged value which makes people appreciate them more. It highlighted a few things that could be fixed and now it is actually quite rare to put stuff in the book.

[DavidM]

Really good advice Abacus and Steve.

The key is to plan what you need, and find a cheaper way of getting it, which still has comparable quality. Haggle on big ticket items like rent and furniture (or get it second hand).

Look at how other shops are displaying their wares and find out whether you can get the same result by being creative.

Best of luck,

David

[MattR]

VIOP Plans and Internet Plans - do the numbers and do the reasearch - currently saving about $2K p.a.

Be lean and mean!

[FS Concierge]

Originally Posted by Steve_Minshall

We started a record book on everything that goes wrong that causes inconvenience, lost time or cost.This was just a line or two about what happened, what was the cost to us, what was the impact on the customer and what we did about it. This gave mistakes an actual acknowledged value which makes people appreciate them more. It highlighted a few things that could be fixed and now it is actually quite rare to put stuff in the book.

Steve, you always have such useful ideas - thanks for sharing them! The Mistakes Book is a new one to me, and I love it. I'll have one operational by the end of the day ;-)

Cheers
Jayne

[mtpocket]

The mistakes book is great idea. I'll start one myself tomorrow! Good one!

[Jed]

Some good tips in here, thanks all.

To those using VOIP - do they find it reliable and good quality? What providers are you using?

[Steve_Minshall]

Glad the mistake book has gone down well. Not my idea just one I picked up along the way.

It does work well but the trick is to make it low key and not an inquisition. If you make a drama about what goes in there then people won't use it and they will just cover things up, or use it for telling tales on others.

Its true strength is spotting the silly things that can-do people just fix up along the way but don't realise the same thing has been fixed up 5 times before this month.

For me it was things like Fred having to go run across town because we ordered the wrong part. No impact on the customer but a waste of an hour. If this happens say twice a month it goes unnoticed as any real issue but over a year that is near on a $1k in wasted wages. And going back to the earlier comments about multiplying spend, that $1k comes straight off the bottom line and fixing it is like making a $10k sale in terms of net profit outcome. Now how much effort would you put in to make a $10k sale?

[Tracey Baird]

Hi Jed,

I'd agree with Steve on the idea of advertising. You can throw big bucks at things like YP and depending on your how well you know your market niche it can be a massive money waster. With advertising you ideally want to trial campaigns on a small scale before rolling anything out with a decent investment behind it. That way at least you can be assured of profitable results. Perhaps something you could combine with Vistaprint - that way you'll have some free resources to play with until you get your marketing on target.

You might be interested in 10 advertising mistakes it also comes with a publication called "Get More Clients".

Best of luck Jed!
Tracey Baird