Really, reducing costs for the biz started last fall when I changed insurance providers. The savings was massive. I will have to dig into the numbers, but it was easily several grand. I think $6,000 is being conservative.
So, with phone savings, trash savings and insurance savings, I lowered my annual costs by maybe $15,000, just on the business side, not personal.
That's encouraging. The biz can survive. It just takes diligence. Take whatever I made last year and add $15,000 to it for this year.
Obviously, I need to keep looking for costs to wring out, but there are only so many non-labor costs to work with. It's not that labor costs are off the table, but I think we're running lean, now, and there's a human aspect to cutting labor costs.
Throw in the goal of reaching 2014, when all our term-debt will be paid off, and when you consider the money that is now going to term loans, that'll add another $40,000 to cash flow. Really, $55,000 isn't a world-altering sum of money, but it's equivalent to the annual income of a lot of folks with good jobs. It'll also come at a good time: when I'm finishing law school. I can use it to pay off my personal loans and start my law practice.
So, things are good, but the name of the game is still survival. Move forward, one step at a time. Right now is a tense time. The weather is not cooperating and we're not getting work. Still, need to just stay in there and take our swings. Every month the biz is still standing is a minor victory.
At the moment, we're pretty strong as far as being current with everything, but next month will be a tough one. We'll just have to keep playing the cards we're dealt.
Thursday, January 26, 2012
Tuesday, January 10, 2012
The $10,000 Project
I am going to set a goal of saving $10,000 this year. Not technically "saving", but avoiding $10,000 in costs. That is real money.
I have a few ground rules for this. One is that nothing I do can have any impact on my son at all. I want to save money, but not at his expense. The other is that I am not trying to be Amish. I'm going to keep cable TV. There's programming on cable that you can't get through Netflix or over the air, like Disney channel, which my son watches quite a bit. Also, I like to keep up with sports now and then.
A third rule is that the savings have to be actual savings that I would have paid if not for taking action. It's too easy to play games with this, like, "I would have paid full price for a pizza, but used a coupon, so I saved $10.00." None of that. It has to be real savings.
Fourth, this will combine personal and business spending. I doubt I could squeeze this much cost-avoidance out of my personal budget, alone.
The first item on this list is my cell phone bill. I'm paying over $200 a month. It's also probable, I was overpaying for a service I requested to be cancelled. At the moment, it looks like I may be able to save about $120 a month on this and might be able to get as much as a $600 credit. So, this move, alone, could save me about $2,000.
I'll keep posting my progress. I'm waiting for word back from Sprint on whether they'll credit me from the date that I requested that a service be removed. If they don't, I'll be leaving Sprint for good. We'll just have to see.
============
January 13, 2012:
Just changed trash service. Will save a little over $160 a month, for an annual savings of about $2,000. We went from 2 dumpsters, serviced once a week, to 2 dumpsters, once a month.
============
January 18, 2012
Have been baking a lot and eating meals at home. Contrast to previously, where I ate almost all my meals, out.
If we take out the acquisition cost of all the junk I bought, this still represents a huge savings.
Okay, here's how I calculated the savings:
1. Bake 2 loaves of bread per week, vs. buying one loaf of bread. I've also already made hamburger buns and will try hot-dog buns here, soon. Conservatively, I'm calling the cost-avoidance $2.00 per week in avoided bread costs.
2. Bake 1 pizza per week, versus my typical take-out pizza order. Conservatively, $20 per week in pizza expense.
3. Eat at home for the equivalent of 5 days a week, versus eating out pretty much every meal, all week long. Conservatively, $5 for breakfast, $8 for lunch, and $10 for dinner, 5 days a week.
Subtract $1,000 in cooking supplies and $2,600 in annual grocery shopping costs, and the total cost savings for the above is $3,524.
4. Avoid one pop from the pop machine, 5 days a week, 8 months a year. Total cost avoidance, conservatively, about $215.
So, food cost avoidance is $3740, for a total cost avoidance so far of $5,740.
==============
Still waiting to hear from Sprint. That should be a $2,000 cost avoidance. However, if they don't pipe up, soon, I'm going to just get a $45 a month plan from some local provider. I also bought an Ooma box, to provide phone service to my home. I really need one. However, I won't include avoided landline cost into the forumula.
However, conservatively, this should work out as follows:
Current cell phone cost is about $2,700.
Cost of Ooma Box: $200
Cost of new Cell Phone: $100
Cost of new cell phone plan: $600
So, worst-case, I'm looking at about an $1,800 cost avoidance.
So, the total should be up to about $7,500 here, soon.
I'm considering dropping my gym membership, but it's so cheap, just $20 a month. I don't have to use it much for it to be well worth it. I think it will depend mostly on how often I get there.
===========================
January 19, 2012: Business VOIP
Okay, getting voip for my home was an inspiration. I am going to get it for the business, too. All told, we were paying about $430/month for services that we can get for $130/month with VOIP.
It will cost us a bit. We need to buy 4 IP phones at $90, each. It will also cost us $250 in cancellation fees for our main lines.
So, costs: $560 in cancellation and new phones. This will probably happen by first part of February, but fudging, conservatively, we'll say we will only save money for 10 months instead of 11.
So, 300/month for 10 months, less $560 in costs and it's $2,440.
Basically, that does it. $10,000 in savings and oddly, the biggest savings just came from telephones. Not surprising is how much money I could save on food.
That was a lot easier than I thought it would be. I think I'm going to see if I can wring out some more savings. I'm going to be on a mission in 2012. I won't retire any of my term-debt, but I can try to reduce other expenses.
So, to recap, how I did it:
1. Saw an overcharge on my cell phone bill. Am switching to a lower cost plan. Eliminated a service I wasn't using. Takes monthly cell phone from about $225 to about $90. Plus, getting a credit for a service that should have been cancelled for a little over $500.
Even if I don't get a new phone, this is a little more than a $2,100 cost avoidance. The key here is to keep reviewing your cell phone bill. They're complicated (if you ask me, deliberately complicated) and sometimes they don't do what they say they're going to do.
2. Got an OOMA box for landline service to my house. That was actually an additional cost, but I needed one. So, +$200. But the inspiration carried through with...
3. Switched to VOIP for business phones. Basically reduced the monthly bill from $430 to $130 a month. Will cost me about $350 for 4 IP phones. Also, will have to pay a $250 cancellation fee from Frontier. However, even after costs, VOIP (including an OOMA box for my house) will save me another $2,100 a year.
4. Reduced our trash pickups at the biz. Half the time, the truck was pulling empty dumpsters. Keeping two dumpsters, but only having them serviced once per month. So, $160 cost savings per month times 12 months; $1,900 for the year.
5. Changing eating habits. Learning to bake. Eating less takeout. Drink less pop from machines. Total savings: about $3,700.
Total is right at the $10,000 goal. This happened so quickly that I feel like I should dig deeper to try and root out any unnecessary expenses. This one, frankly, was easy to achieve because the phone companies were just flat out arse-raping me. The nicest part of all this if you ask me, is that the folks at Nextiva are great and the folks at Frontier and AT&T are useless. I'll be very glad to not have to deal with them anymore.
I have a few ground rules for this. One is that nothing I do can have any impact on my son at all. I want to save money, but not at his expense. The other is that I am not trying to be Amish. I'm going to keep cable TV. There's programming on cable that you can't get through Netflix or over the air, like Disney channel, which my son watches quite a bit. Also, I like to keep up with sports now and then.
A third rule is that the savings have to be actual savings that I would have paid if not for taking action. It's too easy to play games with this, like, "I would have paid full price for a pizza, but used a coupon, so I saved $10.00." None of that. It has to be real savings.
Fourth, this will combine personal and business spending. I doubt I could squeeze this much cost-avoidance out of my personal budget, alone.
The first item on this list is my cell phone bill. I'm paying over $200 a month. It's also probable, I was overpaying for a service I requested to be cancelled. At the moment, it looks like I may be able to save about $120 a month on this and might be able to get as much as a $600 credit. So, this move, alone, could save me about $2,000.
I'll keep posting my progress. I'm waiting for word back from Sprint on whether they'll credit me from the date that I requested that a service be removed. If they don't, I'll be leaving Sprint for good. We'll just have to see.
============
January 13, 2012:
Just changed trash service. Will save a little over $160 a month, for an annual savings of about $2,000. We went from 2 dumpsters, serviced once a week, to 2 dumpsters, once a month.
============
January 18, 2012
Have been baking a lot and eating meals at home. Contrast to previously, where I ate almost all my meals, out.
If we take out the acquisition cost of all the junk I bought, this still represents a huge savings.
Okay, here's how I calculated the savings:
1. Bake 2 loaves of bread per week, vs. buying one loaf of bread. I've also already made hamburger buns and will try hot-dog buns here, soon. Conservatively, I'm calling the cost-avoidance $2.00 per week in avoided bread costs.
2. Bake 1 pizza per week, versus my typical take-out pizza order. Conservatively, $20 per week in pizza expense.
3. Eat at home for the equivalent of 5 days a week, versus eating out pretty much every meal, all week long. Conservatively, $5 for breakfast, $8 for lunch, and $10 for dinner, 5 days a week.
Subtract $1,000 in cooking supplies and $2,600 in annual grocery shopping costs, and the total cost savings for the above is $3,524.
4. Avoid one pop from the pop machine, 5 days a week, 8 months a year. Total cost avoidance, conservatively, about $215.
So, food cost avoidance is $3740, for a total cost avoidance so far of $5,740.
==============
Still waiting to hear from Sprint. That should be a $2,000 cost avoidance. However, if they don't pipe up, soon, I'm going to just get a $45 a month plan from some local provider. I also bought an Ooma box, to provide phone service to my home. I really need one. However, I won't include avoided landline cost into the forumula.
However, conservatively, this should work out as follows:
Current cell phone cost is about $2,700.
Cost of Ooma Box: $200
Cost of new Cell Phone: $100
Cost of new cell phone plan: $600
So, worst-case, I'm looking at about an $1,800 cost avoidance.
So, the total should be up to about $7,500 here, soon.
I'm considering dropping my gym membership, but it's so cheap, just $20 a month. I don't have to use it much for it to be well worth it. I think it will depend mostly on how often I get there.
===========================
January 19, 2012: Business VOIP
Okay, getting voip for my home was an inspiration. I am going to get it for the business, too. All told, we were paying about $430/month for services that we can get for $130/month with VOIP.
It will cost us a bit. We need to buy 4 IP phones at $90, each. It will also cost us $250 in cancellation fees for our main lines.
So, costs: $560 in cancellation and new phones. This will probably happen by first part of February, but fudging, conservatively, we'll say we will only save money for 10 months instead of 11.
So, 300/month for 10 months, less $560 in costs and it's $2,440.
Basically, that does it. $10,000 in savings and oddly, the biggest savings just came from telephones. Not surprising is how much money I could save on food.
That was a lot easier than I thought it would be. I think I'm going to see if I can wring out some more savings. I'm going to be on a mission in 2012. I won't retire any of my term-debt, but I can try to reduce other expenses.
So, to recap, how I did it:
1. Saw an overcharge on my cell phone bill. Am switching to a lower cost plan. Eliminated a service I wasn't using. Takes monthly cell phone from about $225 to about $90. Plus, getting a credit for a service that should have been cancelled for a little over $500.
Even if I don't get a new phone, this is a little more than a $2,100 cost avoidance. The key here is to keep reviewing your cell phone bill. They're complicated (if you ask me, deliberately complicated) and sometimes they don't do what they say they're going to do.
2. Got an OOMA box for landline service to my house. That was actually an additional cost, but I needed one. So, +$200. But the inspiration carried through with...
3. Switched to VOIP for business phones. Basically reduced the monthly bill from $430 to $130 a month. Will cost me about $350 for 4 IP phones. Also, will have to pay a $250 cancellation fee from Frontier. However, even after costs, VOIP (including an OOMA box for my house) will save me another $2,100 a year.
4. Reduced our trash pickups at the biz. Half the time, the truck was pulling empty dumpsters. Keeping two dumpsters, but only having them serviced once per month. So, $160 cost savings per month times 12 months; $1,900 for the year.
5. Changing eating habits. Learning to bake. Eating less takeout. Drink less pop from machines. Total savings: about $3,700.
Total is right at the $10,000 goal. This happened so quickly that I feel like I should dig deeper to try and root out any unnecessary expenses. This one, frankly, was easy to achieve because the phone companies were just flat out arse-raping me. The nicest part of all this if you ask me, is that the folks at Nextiva are great and the folks at Frontier and AT&T are useless. I'll be very glad to not have to deal with them anymore.
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