I just read an interesting blog post from lifehack.org titled “7 Tips for Reducing Your Overhead Costs”. If you like generalist articles and have some time to waste, you should check it out. Great attention grabbing headline, especially in tough trading times such as we are all going through now and its aimed at the self-employed or small business person and suggests that you can slice your overheads so I expected it would be a good read. Although they come up with some great suggestions, overall I was disappointed. Don’t get me wrong, I totally agree with all the concepts they talked about, but that’s all they did. Over 850 words of vague and generalist advice that in the end did not provide you with any concrete or realistic suggestions on how to cut your overheads and operating costs.
One specific example of the “7 Tips” was “Go Paperless”. In theory I agree. That is a direction we should all be going in for numerous reasons including cost savings, environmental concerns and the advantage of being able to easily access all documents at a moments notice on line. All valid points they raised. My question is two-fold; a) is it a realistic possibility to go paperless, and b) to what extent will that improve your business and reduce your costs? Lets investigate.
To go paperless, you will need agreement and buy-in from all of your suppliers and customers, that they will provide you with electronic communication only. Are they all ready for that? And if they are not ready to themselves go paperless or already there, you will need to invest in technology such as scanners, storage and training as well electronic archiving capabilities. Now let me ask you does this reduce your costs and simplify your operation or does it introduce complexities.
As an example, do you now have to outfit your receiving dock with a PC, Scanner and other electronic equipment which requires regular maintenance and upgrading, not to mention repairs, or should you receive your goods with a simple paper based system and try and figure a better production and communication flow. I guess if you were FedEx or UPS, the logical solution would be to invest in a seamless electronic end to end service, which both have implemented, but what if your scale is much smaller? Is there a cost benefit? On top of this you will also need to review the risks associated with a paperless system and workarounds for any downtime on the system.
I think each business has to review their own operations to determine if going paperless is a saving or a load of misguidance by some out of touch business advisor who got his MBA or PhD in business management but has never actually run a business where his own money and livelihood are on the line. Its very easy to advise people in what they should do, but how many of these advisors will show you or provide a process for getting to the end result?
I am not going to attempt to dissect this whole “7 Tips” blog post here as that was just one example of many, but will offer advice to anyone making an effort in researching and learning whilst trying to improve their business. There is so much nonsense, dribble and plain old rubbish out there on the web that most of it will be generalist and will not be applicable to your specific and unique individual needs.
Every small business is unique and every person works differently. There is no “one size fits all” formula in running a business, any business. There are guidelines and there are standards we must meet, but there are no strict and fast rules on how you should do what you do. Yes we must meet regulatory and safety requirements and work in an ethical way, but how you achieve the end result is really up to the individual operator.
Anyone can give advice but you need to ask yourself if it is relevant to you? And you need to specifically work through the benefits and risks associated with any changes you make. If you are a sole operator, normally that is easy and simple, however the minute you start employing people, the issues you face can compound especially as most people are by nature resistant to most change unless you can convince them that it is in their interest.
If you have any specific topics you would like me to address…. let me know.