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Monday, March 18 , 2019, 3:27 pm | A Few Clouds 67º


Paul Burri: Survival Suggestions, Part I

In business, it pays to 'sweat the small stuff'

[Noozhawk’s note: The following is an excerpt from a speech Paul Burri delivered at a SCORE seminar.]

Good evening and welcome.

Paul Burri
Paul Burri

I’d like to preface my remarks by saying that whatever I say here this evening is probably something that you already know. Also, every one of the ideas and suggestions I’ll talk about tonight are mistakes that I learned the hard way after being in various small businesses of my own. All these mistakes cost me a lot of money, and I hope that some of my remarks will help you avoid making those same mistakes.

I have good news and bad news. The bad news is that we’re in a recession; the good news is we’re in a recession.

Of course, a recession means fewer sales, less profits, more financial problems, employee layoffs — need I go on? But here’s the good news. Those businesses that can claw their way through and survive these tough times will come out of it with greater market share because weaker competitors will not be there. Business is zero sum; there is just so much business out there — at least in the short run — and whatever business is lost by a competitor is out there for the survivors to pick up.

You may have heard the expression, “Don’t sweat the small stuff.”

Well, I’m here to tell you that this is the time to “sweat the small stuff.” It’s time to start picking up those pennies and nickels — not the ones on the street, but the ones that you’re losing every day in your businesses in the form of leakage. It’s what I call the Leaky Boat Syndrome.

Think of your business as a boat. If you have a big boat, a few leaks here and there are tolerable. But if your boat is small, those same leaks can sink you. Here’s the thing. When times are good and sales are great, it’s probably not worth your time to worry about a few minor leaks here and there.

What am I talking about when I refer to those nickel and dime business leakages? Things like an occasional lost sale. When you are busy as hell, who cares if you lose a sale every once in awhile?

When you’re busy as hell, who cares if you have a little employee pilferage here and there?

When you’re busy as hell, it doesn’t matter too much if you’re paying a little bit too much here and there in your purchases.

Let me tell you a little story about purchasing leakage. I used to do all of the purchasing at one of my companies until I got too busy and assigned the job to my office manager. It wasn’t until several months later that I noticed that the amount we were paying for shipping supplies had increased about 15 percent. When I looked into why, I discovered that my office manager was now buying those supplies from a different supplier whose prices were higher than the previous one. Why had he switched? Because this new supplier offered a “free gift” for every order exceeding $100. What was the free gift? Some cheap clock, tote bag, baseball hat or something like that, which my office manager was taking home with him.

So the bottom line here is that my office supplies were costing the company 15 percent more because my office manager wanted to get the occasional “free” gift.

— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He is not in the advertising business, but he is a small-business counselor with the Santa Barbara chapter of Counselors to America’s Small Business-SCORE. The opinions and comments in this column are his alone and do not represent the opinions or policies of any outside organization. He can be reached at .(JavaScript must be enabled to view this email address).

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