Cost Saving Measures NOT on your Radar

Ten years ago, after the stock market meltdown of 2008, our company, like most, was looking at cost savings steps. We considered scores of ideas and implemented over a dozen, but the one that sticks out to me was when one of our principals demanded that we remove one third of the light bulbs in every office to reduce our electric bill. The 6 dollars a month that it saved was not all that impactful.
As I move around the business world coaching executives and consulting with companies on how to be more effective, selecting and prioritizing meaningful projects and initiatives is critical. With this is mind here are three cost saving opportunities that are both easy to implement and highly impactful.
1. Credit Card Processing Fees
Check and calculate your current merchant processing fees accurately. Don’t believe the rate quoted to you or get persuaded by all the marketing offers. Simply take your statement, add up all the fees at the bottom and they divide that number into the revenue processed. This will tell you your effective rate. It would not be a surprise if your effective rate does not match the rate that you were offered or promised. If your effective rate is over 3% there is a bunch of money to be saved. And despite what your current processor tells you, switching is an option and it does not mean having to undo all your pre-established software connections. For an honest and competitive alternative try Ethos Processing (www.ethosprocessing.com).
2. FedEx & UPS Audit & Negotiation
If you ship a fair amount ($200k/year or more) with FedEx and/or UPS and don’t use an Audit Service, then there is free money sitting out there for you. Both FedEx & UPS list of over 70 different “assessorial” charges that they add to shipments. They are usually just a few dollars ($2 - $10) each, but when you consider the quantity of shipments, they add up. Many of these are added incorrectly and if you call FedEx or UPS they will reverse the charges. The problem is that it is not worth your time to sit on the phone for 10 – 15 minutes to get a $4 charge credited to your account. Audit Service firms have software that both identifies the charges that should be credited and contacts the carriers to process the credit. They typically charge about 35% of the amount credited. It may sound like a lot, but considering that you are not getting anything today, it is found money. And you don’t pay anything if they don’t find any savings. Many of these companies also have a service to help you negotiate better rates with FedEx and UPS. A great team can be found at Lojistic (www.lojistic.com).
3. Wireless in Your Warehouse
Still running wires to computers and printers in your warehouse? Or are you running mobile computers and scanners on the wireless that your front office uses? It is time to upgrade the wireless in your warehouse and not with something that you found at Best Buy. Put commercial grade wireless in your warehouse and you will rid yourself of dead spots, latency, and general slowness. Your warehouse team will appreciate it and their efficiency will increase. For about $5k, a 50k square foot warehouse can have screaming wireless. (And about $1k more for each additional 10k sq. ft.) Don’t continue to mess around with old or partial wireless in your facility. If you don’t have a commercial grade wireless company, try Delta One (www.d1sw.com).
Cost saving measures are great to talk about, but as we coach in my business, you don’t benefit from the idea until it is in place. These three options are easy to implement, and you will see the benefits immediately. Why wait until the end of the year to get them going. Act today!!
About Jason Stern: Mr. Stern started Gift of Time (www.giftoftime.us) to provide a cherished resource “time” to business owners and executives. By focusing on the critical areas that lead to results, business leaders avoid wasting time and achieve more. His firm Gift of Time (www.giftoftime.us) works with companies and their leaders to become more effective in less time. He can be reached at jstern@giftoftime.us or 949.244.1885.