Column {the shop owner}: SMALL SPARE CHANGE CUTS = BIG SAVINGS
Reduce expenses to stay afloat in the economic downturn
Whether or not your shop has been hit particularly hard by the nation's economic downturn, the grim financial news is a good reminder to continually look for ways to reduce business expenses – without sacrificing repair quality or customer service.
One thing that's helped me do this is to stop looking for the "home run." If you've been focusing on running an efficient business, the odds are against finding a way to quickly save thousands of dollars a year. But you might end up saving that much by looking for multiple ways to trim $10 a week here and $35 a month there.
Here are some of the ways we've worked to reduce our expenses a little bit at a time:
- We use a programmable thermostat to ensure our heating and cooling is only operating when it needs to be.
- Your utility providers likely offer free "energy audits," onsite reviews of your facility to look for ways to reduce your energy consumption. The utility also can provide information about any energy-related tax credits that can help pay for an investment in more efficient lighting, for example, or other improvements to your facility.
- We've adjusted all our printers to lower toner settings to get more life out of cartridges. Again, this may only save pennies a day, but small savings add up.
- In talking with our paint department employees over the years, we stopped buying 12-inch masking paper because they agreed 6-inch paper met their needs. We asked them to try out the less expensive white masking paper rather than gold, and they found it worked just as well. Similarly, we found that the less-expensive line in the brand of tape we use worked just as effectively. Again, we won't make such a switch unless our employees agree it doesn't reduce quality or efficiency.
- Our business insurance agent (who handles my personal insurance as well) showed us the premium for the company-owned vehicle I drive would be lower if the car was instead included on our personal policy.
- Check with your bank about ways to reduce or eliminate any of the fees you pay – perhaps just by maintaining a minimum balance in the checking account.
- Rather than just "beating up" vendors for better discounts, look for group buying opportunities. I know of at least two co-op groups in the industry that, in exchange for a small fee, can earn you hundreds if not thousands of dollars on rebates for items you're already buying. Similarly, membership dues in a state or national association almost always can be offset by savings you can get on insurance, products or services through vendors with which those associations have agreements.
- Buy in bulk whenever possible. We've saved a lot on office supplies by batching orders and buying larger quantities. Think about other purchases on which you can bulk up. I recently ran into another shop owner at a local steak house where I was buying gift certificates for marketing and employee gifts. He told me he usually buys two or three such gift certificates a month – but has never received the extra free gift certificate I get because I buy all at one time - about the same number as he does over six months.
My last suggestion: Get your employees involved. Whether you offer a reward system for money-saving ideas or not, make sure you ask for (and acknowledge in front of the group) their input. They have a different perspective on the day-to-day operations, and will often come up with cost-saving suggestions you might never have considered.
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About the Author
Camille Eber
Camille Eber has been the second-generation owner of Fix Auto Portland East in Portland, Ore. since 1989. The company, founded in 1946, has earned the I-CAR Gold Class Professionals designation every year since 1991, and won the “Business Integrity Award” presented by the Better Business Bureau of Oregon and Western Washington in 1997.