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[27 Nov 2007|09:23am] |
Co-authors: Randy White & Cedric Justice
Financial choirs around the world are finally singing that the US is in a recession. If you operate a business, you didn't need to wait to hear that, you already knew it. It arrives every month in the form of rising bills and smaller profits. As your operational expenses keep rising, you find yourself wondering how many more payrolls you can tolerate in these financial conditions.
Here's the good news: You can quickly trim some fat right now without cutting or gutting your employees. Here are five fast ways to save your business thousands of dollars a month during the recession:
1) SOURCE LOCALLY
Sourcing local products and services improves implicit costs, such as delays in business, transportation costs, and depending on the industry, freshness. The sustainability benefit is three-fold: economically it potentially saves your organization money; socially, it improves dollar velocity, improving the local economy. This improves the potential work pool your organization can draw from as well as the local infrastructure and ability for local customers to afford your product or service. Environmentally, it shortens supply chains, which uses less fossil fuels in transportation of goods.
TIP: Small businesses can barter with one another. Big Box stores do not have as much luxury in that department.
2) DITCH THE WASTERS
Here are three common wasters you can cut immediately:
Water coolers refrigerate your water and also heat up the water. It is a redundant system that is an expensive luxury that is unnecessary. In areas like Portland, OR, the tap water is some of the best in the country. At worst, one can buy a Brita filter and have a pitcher of cold water in the refrigerator. Hot water can be obtained through the microwave or the coffeemaker. Additionally, office water heaters are available for purchase or subscription, whereby the service of hot/cold filtered water is sold to you, and the cost of the water is usually absorbed by the building. One client was spending $130/mo on bottled water and now spends $35 for the service of the water heater/cooler (Buying one of these units is about $600 with $35 for filters that need to be changed every 9-24 months depending on the model). It has saved them time, money, resources, and real estate. Environmentally, producing plastic and shipping water in trucks makes little sense, especially when our society has plumbing as a fundamental infrastructure. Water purchased in bottles is in the dollars per gallon order of magnitude, water that runs through plumbing is in the cents (less than $0.10) per gallon cost. Additionally, it takes out the element of employee passive-agressivism prevalent in offices where employees get upset because someone didn't change the water bottle out.
Turn out the lights when you leave and turn down the thermostat:
"Are you trying to heat the neighborhood?" "Didn't anyone tell you to turn the lights out when you leave the room?" These are utterances from a grandfather (that and "I walked to school uphill in the snow both ways"), but they came from a time of scarcity. Heating a room that isn't being used and lighting a building with no one in it simply doesn't make any sense. In fact, I've worked in a building where there was a small break room with the light on and it was locked from the outside. What's the point of that? If you use less energy, chances are, the lease terms you have next period aren't going to have an energy premium set on them. In fact, why not work with building management to give you a share of the savings you implement? Set policies that encourage and enable people, don't be an authoritarian or make people feel guilty, it doesn't work.
TIP: Get a double-side printer and use recycled paper:
Many companies have a double-sided printer, but it isn't set to default. Have your IT staff set the printer to default to double-side printing and you can save up to half of your paper costs. If you don't have a double-sided printer, you can also set up a second tray of leftover paper to print to the back side of drafts you've already used. The idea here is to default to what is least resource intensive, and have the super-white virgin paper be a premium, not a default. Recycled paper is currently more expensive than virgin paper, but that's due to the market and to externalities. If you demand recycled paper, it will become cheaper as more demand it... economies of scale. Plus, if you're using leftover paper scraps, you've cut your budget for paper by nearly 50%, so you can afford a 20-30% surcharge. Paper creation is an energy intensive process that pollutes the environment with nasty chemicals (plus, paper mills stink!). Using recycled paper cuts the emissions for these chemicals as well as energy.
3) PROMOTE ALTERNATIVE COMMUTING OPTIONS
Telecommuting may not work for everyone, but it may work for some. A lot of productivity is lost when people have to leave early to get their kids from school and it could be a cost center for them to have their kids in daycare. Besides the child angle, people who don't commute in grinding traffic for 1-2 hours today will be much more amiable and rested when coming to work. Paying for a parking spot is about the worst thing you can do for productivity, for the environment, for reducing taxes, and for your bottom line. Instead, give your employees options: some companies are starting to give employees a transit budget. To qualify, they have to take an alternative form of transportation. The incentive pays for public transit, and if the employee bikes to work, they keep the allowance. It is a taxable expense to the company (check with your accountant before going through with it, as laws are different everywhere) in optimal situations. This reduces your carbon footprint (which, if you could track, you could sell the carbon credits), increases employee health (less stress, more exercise), and increases productivity. Additionally, goodwill is extended to your labour, which pays off in innumerable ways: employee retention, corporate knowledge, productivity gains, decreased utility costs and real estate pressures (if you only have 200 employees in the office instead of 1000, you're probably going to need fewer desks, square footage, and heating/lighting). You may even be able to pay less because your employees won't be saddled with the costs of commuting in time, energy, and fuel costs, they can accept a bit less. Bicycles are much cheaper than cars to maintain, and usually the cost of one car payment to buy; daycare is the cost of most one-bedroom apartments. Making your employees aware of this can create some huge gains, both for you and for them.
TIP: Your employees can set up a carpool right now for free at www.carpoolcrew.com
4) GO LEED (OR BEYOND)
Green buildings have been shown to increase employee productivity, reduce energy inputs, cost less to maintain, and benefit society as a whole. Holistic systems tend to work when they're thought of together, and the added costs, if any, will definitely pay off in the decrease in risk exposure you have to spikes in energy prices, fuel costs, political strife in faraway lands, etc. Your employees are the most expensive part of the building per square foot. Ask your employees what you can do together to spruce up the work place while making the space greener. And make sure you measure it. Metrics are everything. If you know how much energy your cell phone charger uses by being plugged in or how much your computer uses by not being on standby, then you can make the conscious decision to unplug or turn off. But you need the data first. Consulting firms and electronic gadgets can help you with this, measuring everything from waste outputs to energy consumption to carbon emissions. Most people care, but without having any numbers, they can't make informed decisions. Get your bean counters involved; but remember productivity is by far the most bang for your buck.
5) TAP INTO YOUR INNER LEADER
Companies who employ the golden rule and who create inspired teams or tribes have a real advantage over hierarchical, authoritarian, 'draining' workplaces. One of the simplest things you can do to save money is treat others well. Re-read Dale Carnegie's "The Leader in You". If your employees hate working for you, they'll do everything in their power to exploit the benefits you give them. If they love their job, it will show in the work that they do, and it will show in your organization's bottom line. People who love their job don't call in sick as often, which means that you can depend on your teammates and that meeting you call will be fully staffed with the expert you need to make the sale. Inverting your management structure is instrumental to doing this. Managers are support staff for production people. Once that mentality is implemented, there's a grassroots shift in how the company operates. Drama, strife, and other interpersonal relations are smoothed. Asking your employees what they want/need will help you to better meet your clients' needs, as anyone 'under' you is closer to the front lines than you are.
With the arrival of Peak Oil and a fast warming climate, we are entering a hard period of time. As the dollar continues to decline in value and consumers struggle to pay their debts, it is imperative your business be stunning. Now is your time to shine, and if you adopt these five practices, you will see improvements in your bottom line, employee attitudes, and general business health.
Randy White is a Peak Oil analyst with Green Mind Marketing, a firm focused on helping businesses maintain profits using post-petroleum marketing tactics. randy@greenmindmarketing.com
Cedric Justice is a business analyst and management consultant with Colourless Green Ideas, a firm focused on global business and sustainability (the yin/yang of our modern economy) colourlessgreen@gmail.com
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