The “experts” are saying that we are facing a severe recession. After I posted my top ten tips on how entrepreneurs can save on costs, here are my top ten ways to waste money:
(1) Unnecessary travel and its evil twin, unnecessary meetings: Going to London again? That’s $1200. Flying to New York? $700. Why are you traveling? Do you really need to be there? Why can’t you talk on Skype? What about email? People waste huge amounts of time and money simply to put in “face time”. In most cases, the motivation for traveling is office politics. We can’t afford the luxury of office politics anymore. Stop unnecessary travel.
(2) New computer equipment: I know, this is a difficult one. Apple has just announced upgrades to its Mac Book, Mac Book Pro and Mac Book Air. I am already drooling over them. We’re all sorely tempted to buy the latest gadgets from Apple, Nokia, Asus, Sony, whatever. But resist! Unless your computer or phone is really falling apart, don’t upgrade. Ask this question: will my new gadget get me more revenue? If the answer is no, don’t buy.
(3) Coffee from Starbucks: not only is the quality of Starbucks coffee well below what is acceptable, it’s expensive. Go there everyday and you will spend $25 a week on coffee ($100 a month). What they charge you is not worth what they give you. Dump Starbucks.
(4) Cellular roaming charges: there is no excuse for paying roaming charges. Plan ahead and read my earlier post on top 10 tips for cutting costs.
(5) Staying in chain hotels: if you really have to travel, why pay $200 for a drab room in the Marriott or the Sheraton? There are many small boutique hotels and B&Bs in cities around the world that provide good value for money: better decor, friendly service, free breakfasts, free Wi-Fi, lower prices. Stop being lazy and check them out. There are sites such as Weekendhotel.nl for the Netherlands and Belgium. My other site, Mapplr, also lists boutique hotels and B&Bs in various cities, many of which charge far less than chain hotels.
(6) Michelin-starred restaurants: Michelin uses ancient criteria for evaluating restaurants and in many cases, the restaurants upon which they confer their stars are NOT the best ones in the city. The Michelin guide stands for one thing: it is used by insecure people who (a) can’t be bothered (or don’t know how) to find the really good restaurants; or (b) want to brag to their friends that they’ve been to a three-star restaurant (trying to show off that they have money and/or taste). For the restaurant owners, a high Michelin ranking is a license to charge customers gob-smacking amounts of money for an experience that is usually disappointing (unless you are so impressed by white tablecloths, silverware and other people sitting around you who are impressed by Michelin). What a scam. I am not impressed when a business relation takes me to a Michelin restaurant. I am impressed when she takes me to a terrific Vietnamese or Indian restaurant. Ethnic dives, although lacking in ambiance in many cases, have much better food. And they are a lot less expensive.
(7) Personnel: not all personnel are useless and a waste of money but I know too many high-tech startups that have too many employees. When I say too many, I mean people who are not qualified for the tasks that the company wants them to do, people unable to do more than one thing, people who are in their current position because it feeds the ego of the CEO. If you are a founder and can fire the CEO, the staff and make changes, do it now. Added bonus: fewer people means fewer meetings.
(8) Cheap, poor-quality clothing and accessories: a $50 coat, a $35 pair of shoes made in China . . . seem like good ways to save money, right? Wrong. The coat will disintegrate after a couple of washings, the shoes will kill your feet and die after a few wearings and then, you have to go out and buy again. Buying lots of cheap clothes and throwing them out frequently contribute to the overflowing lava of garbage in landfills around the world. And, you look like a dump.
I once bought a winter dress from Zara (purveyor of inexpensive, trendy women’s clothing), intending to wear it in a few weeks when the weather turned cooler, but alas, the dress began disintegrating in my closet. “This dress will self-destruct in five seconds”, it seemed to announce as the sleeves began to distance themselves slowly from the rest of the garment. This is a dress I had not yet worn and I check my purchases carefully before leaving a store, so I know that all this occurred in the solitude of my dark closet.
A friend of mine bought a shirt in a men’s store (also a purveyor of cheap, trendy clothing) and after washing it once and actually hanging it to dry (he followed the instructions to the letter, not once did he put it in a dryer), he found that the shirt had magically re-arranged itself. The buttons did not align anymore with the button holes, one sleeve was much shorter than the other, and one side of the shirt hiked up to the top of his jeans, leaving the other to look down forlornly in a state of despair.
Spend money on a few key items: a very good coat that will last for years, a good bag and good shoes. The clothes and shoes that give best value for money come from Italy. The same with tricot (knitwear): buy “made in Italy”.
(9) Office space: this is up there with unnecessary travel and stupid meetings. People should be able to do most of their work from home and conduct their meetings telephonically from home. If they need to go to meetings, better that they visit customers and partners. So if you arrange your company affairs in this way, you don’t need much office space. But if you are a “put in face time” organization, you will waste money on renting office space.
(10) Expensive “company” telecoms packages: this is where you sign up with AT&T or some other telco for a package deal (mobile phone subscriptions for the staff, etc.). Let people get their own mobile phone subscriptions and try to use Skype regularly.
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