The cliche "penny wise and pound foolish" often is used when we wish to justify small unnecessary expenses, (wrong) or when we spend much time on little things while failing to consider the real cost and importance of major expenses (right).
If we are giving as much time and attention to the cost of paper clips or whether we can spend a little extra for coffee, as we are to our key staffing and business development and marketing efforts, I suppose we are penny wise and pound foolish.
But if we carelessly allow expense accounts to increase unchecked-- even if most of the expenses are "pennies" individually, we are also penny foolish!
Recessions, of course, are good times to bring the "wise" back into our thinking. Here is an example.
We have several out-of-town employees, and last year, we flew them all into Ottawa for the bi-annual planning review meeting.
This time around at today's meeting, two employees joined us by teleconferencing. We saved about $1,000 in flights. We aren't spending $250 for an evening pre-conference meal at the Keg. One of our sales representatives negotiated a trade-out at a local hotel, so two employees who are travelling into town for the event (one lives within driving distance; the other took the train), are staying without cash cost.
But can we do better? Our consultants said they would set up a conference line, and use their service. So I asked them: "How much does this cost?" Their response: "We don't know -- but look at what you are saving on travel costs."
Well, unknown reimbursable costs scare me in the current circumstances. On Friday, one of our sales representatives (Chase) forwarded marketing materials from Vesta Networks. Their price: $.06 cents a minute from callers anywhere in North America (toll free) compared to $.12 to $.16 for Bell (the service provider we had been using) and Primus. Last month's teleconference bill was approximately $700.00. So a 50 per cent or great savings makes sense.
Today, I also realized that our mailing list has more than 11,000 names, but that mailing service provider Constantcontact.com doubles its fee when there are more than 10,000 names in the database. So can we remove some unnecessary names, especially of people who don't really want to receive our emails? Certainly. You may be here because of a special "mass mailing" to remove names which shouldn't be there.
The key in finding these savings is to remember you should allocate appropriate time and energy to achieve them. If it takes just a few minutes to test the system, and you can save $1,200 to $1,500 a year because of the savings, do it. If you are distracting yourself for weeks and analyzing every minute detail, then don't.
One important thing about penny-wise savings. This type of initiative, like most successful business endeavours, needs to come from both the heart of your employees -- and your own practices. If you expect your staff to be happy while you continue to travel first class (or travel at all) while they are restrained in their movements, expect rebellion, rule violation, or simply bad morale.
But it never hurts to be both pound -- and penny -- wise.