I spent today going through accounting records. Now, isn’t that everybody’s dream Sunday? I found something pretty interesting though. Wow! Have my costs gone down.
In fact, I’m sure I had been overpaying for a few years more than I should have. In March 2007, I bought my partner out of TaxLoopholes and some other ventures we had. It was an easy and amicable parting. My partner had other projects he wanted to do and his heart just wasn’t in the company any more. One of the first things I did was question the status quo with the companies.
For example, we had a hosting company that also handled our email blasts. The charge (okay, don’t choke now) was $3,000 per month. But then he had all these added things on there so the bills were rarely under $4,000 per month. PLUS we had to buy our own server.
My first move was to change hosting companies. I got that for $10,000 per year. And we started doing our own email blasts in house. At the same time, we went virtual and cut staff so our in house tech costs went down. The email blasts in house cost something, so it ended up all working out.
Now, I’m looking at the $10,000 per year and thinking I was crazy for ever paying that last year. At the time, $10,000 or $36,000 was a no brainer. Now, it’s more like $500/month (or $6,000 per year) with the competitor.
I hope I haven’t lost you in the numbers or bored you to tears. The morale of the story, I think, is don’t assume anything with your business. There are a lot more solutions these days to just the same old way of doing business.
August 3rd, 2008 at 8:07 pm
Great story for Cashflow Sunday!
August 4th, 2008 at 8:34 am
Diane, I just spent two weeks at our main business back east and did a lot of cutting of costs…and it was amazing how much there was to be saved. Some savings came by using technology more, but some were just “no-brainers” that I couldn’t believe no one there thought about (e.g., sending 2 stock transfers a week to our CA warehouse; one box that weighs more is definately cheaper than 2 separate shipments). Thanks to your mention in the Taxloopholes Forum we will be using Skype for our phone calls between MD and CA, cutting the phone bill. I could go on, but bottom-line all of the changes will put more $’s ON our bottom line!
August 4th, 2008 at 12:11 pm
Mary, thanks for your comment. I keep going back to something I remember hearing: “The worst financial decisions are made in the best of times.”
When money is easy and the economy is booming, it doesn’t matter if something costs a hundred or two more. There’s plenty of money to be made. Our systems get sloppy. We hire too many people. When we have downturns our businesses actually run better.