Why Money Matters to Business Efficiency - dummies

Why Money Matters to Business Efficiency

By Marina Martin

Money matters as much as time to your business or organization’s efficiency. So many people (and organizations) sign up for recurring services and then forget about them — never noticing the small credit card charges here and there – that most vendors actually bank on a revenue stream from inactive customers.

Root out unnecessary costs with the 5 Whys

If you want to start increasing efficiency at your company, take a look at your bank statement. (If you’re at a large organization, an expense sheet for your department may be a more manageable start.) Go through each line item and follow the “5 Whys” exercise. At the first expense, ask “Why?” Then ask “Why?” in response to that answer, and so on, until you have asked “Why?” five times.

It can feel silly at first, especially for expenses that may seem perfectly obvious (like property tax), but you’d be surprised by the cost-savings ideas that this simple act can generate. At the very least, you’ll find some expenses that you don’t need to be paying at all or that you haven’t comparison-shopped in a long time.

Ask for savings to lower costs

Finding a more affordable rate for supplies, utilities, or even credit card interest rates doesn’t have to be a large project. Often, all you have to do is call and ask! You don’t have to call up your main supplier and threaten to jump ship for his competitor if he can’t give you a better rate.

Just ask: How can I lower my costs? There may be a number of savings avenues you didn’t even think to explore, such as a discount for electronic billing or automated payments, volume discounts, or the opportunity to switch to an equivalent (for your needs) but more affordable item.