Waste not, want not and your business will profit

When you need to find savings in your business, look at the areas of systems, energy, people and inventory

David FullerI was eating breakfast with my son Caleb the other day and noticed he left his crusts on the plate.

“Caleb,” I said, “do you know how many kids in the world would beg for scraps of food like you’re wasting?”

Watching him made me remember my parents’ reminders about the millions of starving children in China who would love to eat the food I was wasting. My grandmother, having lived through the Great Depression of 1930s, constantly reminded me that those who “Waste not, want not.”

I’m still conscious of my waste and consumption.

So how do a few crusts on a plate have anything to do with business?

What we do at home usually is consistent in other parts of our lives. If we treat our family badly, we’re probably treating our staff badly. If we’re sloppy at work, we’re probably sloppy at home. If we pay attention to things at home, we’re probably paying attention to details in our business. If we’re careless with our resources at home … you get the picture.

Canadians have had it pretty good for the past few decades. We’ve managed to ride out the waves of the big economic hits that the United States suffered in 2008 and 2009. Our house prices have climbed for 20 years. Our population has increased across the nation.

We have had many sectors of the economy with periods of sustained growth that enabled people to have steady jobs, which has in turn fuelled small businesses. The government has pumped billions into the economy for capital projects (which still must be repaid by future generations).

We’ve had low inflation for 20 years, which has helped many businesses control their costs and remain profitable.

It’s true that a large percentage of the small business owners aren’t living in luxury and aren’t satisfied because they’re only marginally profitable or not profitable at all.

And there are sectors of the marketplace that have experienced transformational changes due to technology.

But on the whole, business in Canada has had a pretty good run. Overall, the economic stability of the past couple of decades has allowed many owners to grow fat and many organizations to become complacent.

So why, if times are still pretty good, should we consider looking at waste in our organizations?

This is like my son saying, “Dad why should I worry about a few crusts while we have the whole loaf of bread sitting on the counter?” It’s not just the concept that there’s more where that came from, it’s the realization that the taps to our good life could be turned back at any time.

One only has to consider the record levels of government and personal debt in this country to understand that we can’t continue to live the high life forever. Sure, the government might start printing more money and inflation could reduce the personal debt and income levels. Or will it?

Increased inflation means increased interest rates as investors need a greater return on their investments to cover their losses due to inflation. This means that interest rates go up, there are more bankruptcies, house prices drop, there’s less construction and the economy starts to shrink as investors pull in their money.

I remember buying my first house in 1989 and paying 14 per cent interest. I’ve been in African countries with high inflation rates. It’s not a pretty scene. But it’s like telling your kids that wasting food affects kids in other countries. Sometimes it doesn’t sink in until they see it first hand.

When we think about waste in businesses, there are a number of places that most organizations could typically look to find savings. In my book Profit Yourself Healthy, I focused a whole chapter on waste in businesses and listed 107 areas of your business where you probably could find savings. The biggest issue for most businesses is that they’re not thinking lean.

Lean is based on the concept that businesses can lower expenses and become more profitable with a just-in-time mentality. This means we look for ways to produce and deliver our products or services as efficiently as possible in order to supply our customers with the highest quality products or services in ways synchronized and systemized to reduce waste.

The biggest waste in most businesses are in the areas of energy, people and inventory. When we don’t have efficiencies between departments; when our ordering is not in sync with customers needs; when our systems don’t ensure that our employees are working efficiently or accountably; or when our quality doesn’t meet our expectations every time, we have waste.

Waste always has a cost. Usually that cost is monetary. When small businesses report that they’re only marginally profitable or not profitable, they should consider how they can reduce their waste. If waste equals money, then the “Waste not, want not” motto should be applied.

It might only seem like a few crusts or crumbs, but those crumbs add up and before you know it, the savings might allow you to be rolling in the dough.

Troy Media columnist David Fuller, MBA, is a certified professional business coach and author who helps business leaders ensure that their companies are successful. David is author of the book Profit Yourself Healthy. Waste no time in emailing your crumbs of thoughts to dave@profityourselfhealthy.com


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