So how do you decide which option to go with? You need to be able to do some serious analysis of the short- and long-term costs if you want an answer to that question, so let’s try to build some framework for that.
First of all, think about things that could have regulatory implications. It’s true that almost anyone can get a quick orientation on proper food handling and do a good, safe job in the kitchen. But without the formal certification to verify that those procedures have been properly taught and understood, those workers need a State Food Safety food handler’s permit. This is the only way to verify that you are in compliance with the law.
Will that matter? If there’s never a case of foodborne illness or a violation of alcohol serving standards, it may never come to light. But such instances are very common anymore, so the risk is very high that workers who aren’t fully qualified could be found, costing you fines, fees, legal costs, and much more.
Speaking of financial risk, think about your insurance coverage. It’s very easy to scrimp on this, thinking that the odds are low that you’ll ever use it anyway. While it’s true that you are unlikely to experience a fire, flood, or tornado, the impact of losing against those long odds is massive. What you’ll pay in premiums will pale in comparison to what a total loss of your livelihood will cost.
Instead, analyze your insurance and see about ways to reduce the cost. Just as you shouldn’t pay for goods you don’t need, you shouldn’t pay for protection you don’t need. This is an especially important step as your business evolves; if your early days involved delivery of product but you’ve since eliminated your fleet in favor of paying a shipper, you should talk to your agent about altering the type of liability coverage you carry.
There are plenty of areas where we can reduce the cost of an expenditure without eliminating it. Equipment costs can be a big part of that strategy. We all want to use the best of everything, but buying equipment we don’t need (or going cheap when we shouldn’t) can wreck our future. A wise business manager breaks it down a little from that.
After all, we have the items that we use constantly each day. In the case of those purchases, the top drawer is the best place to shop. We want the precise performance, the long-term durability, and the customer appeal of working with the best.
But for others, the use is less frequent and less essential, meaning less durability and less quality is required than what we need from the core equipment.
Think of an office setting. You may have most records stored electronically, meaning you have few confidential documents to shred. In that case, a residential-type paper shredder might fit the bill just fine. On the other hand, if you handle lots of financial data or personal health information, you’ll want a commercial model–or maybe even a contract with a shredding service.
The point is to cut corners on things that you don’t need as badly so that you can better afford the essential items of your trade.
Most businesses are really good at increasing revenues. They study the market, develop advertising plans, and create innovative goods and services. But they often miss out on savings in production. Remember that a penny saved is still a penny earned, and find ways to wisely cut costs in your business.
Photo: Lee Abbamonte
Alexa Mason is the blogger behind Single Moms Income, a personal finance freelance writer, and an online entrepreneur. Come hang out with her on Facebook and Pinterest.
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