Overheads like rent, mortgage, salaries, are often fixed. However, most other things you spend money on depend mainly on how much you use.
To cut down on your electricity bill, a simple way is to check for points of waste in your insulation, and also your energy usage habits.
When a room (in your office, factory, or home) is not occupied, leaving the lights and/or heating on will lead to avoidable increases in your energy usage, and payments.
Why You Need to Explore Variable Costs Reduction (A True Story)
Seven years in the technical function of a large multinational manufacturer, taught me the importance of Variable Costs Reduction: a concept that can be applied to any area of life.
I saw how doing so can get a company struggling with cash flow, to a point where it has excess cash in the bank within a 3 year period.
Only then did the top decision makers carry out capital expenditure to buy new plants.
Before then they simply challenged us to employ World Class Manufacturing plant and process management principles to get the aged bottling plants to generate the target outputs.
Then they pushed the sales, marketing and distribution arms to exploit fast moving products outlets markets, to generate revenue faster. This smart strategy paid off, making the company spend less to get more output from each plant. And this led to massive increases in profits.
Try (as Often as Reasonable) To Get Things Done Without Spending
I’ve written in the past about the option of bartering your products and services in exchange for something you want from others.
But there are other ways.
Last week, I had two meetings regarding my Quick and Dirty Guide for English and French learners. What I learnt made me decide create an auto run CDROM based demo of the guide.
To prepare the auto run CDROM, I relentlessly searched the web for software that would meet my needs. In 2004, I’d created and distributed auto run business marketing CDs to prospects. The software I used then has since been discontinued. But I knew many others existed.
It took me a while, but I eventually found one – and it was FREE. It allows me create auto run CDs with customizable menus, and NO nag screens or advertisements in the finished products.
What’s more, it does not need to be installed in the PC it’s used. Also, the executable files it creates take up very little space on the CD – unlike many others.
Last Sunday I finished creating the auto run CD based version of my language guide. It’s has custom menus that instantly launch videos, web pages and the Excel workbook guide.
And it’s just like I imagined it!
I could have bought any of the other software for $25 or more. But it’s unlikely that for my purpose, the benefits of doing that would have been worthwhile – at least at this early stage.
And that’s my point. Sometimes you’ll simply have to think smarter, to discover better ways to achieve your goal at little or no extra cost.
Final Words: Look for Bargains & Concessions (A Lesson from the Truly Wealthy)
In 2001, I bought a copy of the little book titled “The Millionaire Next Door”. In it I found confirmation of ideas mentioned above.
The book discusses research based evidence from over 2 decades of close monitoring of wealthy individuals across America.
The authors found that frugality and financial prudence was a key strategy most of these wealthy people employed to amass wealth, and to stay rich.
What’s more these true millionaires shamelessly search for and request bargains. And they shop where they can get such concessions. Not where inflated prices cannot be negotiated.
In case you’re wondering, these wealthy people had very few celebrity type people listed amongst them by the authors. The indices used to measure their net worth put them way ahead of those who live high consumption lifestyles – buying latest gizmos, shopping loud etc.
Sadly, in some cultures people (who ironically are not wealthy) regard those who behave like the wealthy mentioned above as “lacking money”, or “poor”.
Like I always say, it’s better to let people think you do not have, than to go out of your way to show that you do, and then end up not having eventually!
The choice, of course, is yours to make.