Cut Five Percent

Whether you are sitting around the conference table of the office or the kitchen table at home, if you look at your budget of the last year, almost always you can find 5% that you can cut on your spending.

The challenge is… do you ever do this exercise?

When was the last time you reviewed your companies’ expenses? Did you look closely at whom you spend money with and ask if there was room to cut? Here is what you need to do.

Categorize your expenses by whom you spent the money with. Then sort the list by the amount spent so that the largest at the top and the smallest is at the bottom. You want to work with the vendors whom you spent the most money with, as there will be more room for trimming.

Here is another reason to focus on the larger accounts. If you cut 50% from an account that you do $500 per year with you will have saved $250 but if you could 5%, one tenth as much, from a client you do $20,000 per you with you will have saved $1,000 which is four times the amount but a much smaller cute percentage wise.

So what you want to do is look at where you spent you money and see if there are any areas you can cut and/or negotiate with your venders and suppliers.

There may be an opportunity for you to consolidate what you’re purchasing. If you are getting your plotters supplies from one company but you are doing all of your printing with another company, you may be better served and get better pricing if you did all this business with a single vendor.

Here is a reminder. DON’T BE A CHEAPSKATE.

You want to negotiate but you want to treat your venders with respect and fairness. Just as you expected to be treated from the people that are paying you. There is nothing wrong with asking for a discount, but be kind about it.

True Story… when I started my engineering practice, we just started getting our printing done at one of our local reprographics companies. Being an engineering firm we didn’t have nearly as much volume of printing as an architect office did. However, we had a project that came up where we were going to be doing a lot of printing so we went in and were talking to the manger about it. They pulled out this magical book that had these huge discounts. This pricing book is for their professional clientele not the people that come in off the street. We were paying the off the street price rather than the discounted price that had about a 40% savings.

We could have asked for better pricing two years early, had we done that we would have saved a lot of money.

So, there may be discounts out there that you just haven’t asked for.

So just ask!

“Do you have any discounts for the people in the industry?”

Again, just remember, nobody like cheapskate but you have the right to shop around because it is your money we are talking about.

In another upcoming post, we will talk about other areas that you probably have not looked at in a while that you could grant you a great deal of savings.