Frugal is Back
Here’s how to channel your inner miser–the right way.
By Tiffany Meyers
As recessionary gale storms blow, entrepreneurs are reining in runaway costs. “Smart entrepreneurs are doing more with less,” says Joseph R. Cardamone, president of the U.S. Federation of Small Businesses. “With diminished cash flow and tight credit, only those businesses that operate efficiently will survive this economic downturn, which may last several years.” So if you’re going to make like a bird and go cheap, these measures can help and range from relatively to totally painless.
Announce your plan to ration paperclips and watch employees use binder clips like they’re going out of style. “Whatever savings you see from one-off efforts will be short-lived, while costs pop up elsewhere, like for binder clips,” says Adam Hartung, managing partner of strategic business consulting firm Spark Partners.
Instead, ask employees to map out how they do their jobs from start to finish, then solicit their ideas for efficiency gains, explains Hartung. “Instead of saying, ‘We need to cut travel costs’–which will get everyone groaning–say, ‘Let’s look at how we get work done and see where we can make changes.'” To jump-start imaginations, ask: How would you do your job if you worked at a different company? How would you do it if you were four years in the future?
You might discover that some part of billing could be automated, a step in payment processing could be eliminated or client interactions could be handled via web conferencing. “Now you’ve introduced more efficient processes,” Hartung says, “and the savings will be everlasting.”