Having run my own photography business, mostly by myself, I co-founded Magnus with one of my roles being managing the business and staff on administrative tasks. This includes shopping to buy everything from computers, video cameras, to pens and paper. We ran Magnus without employees for a couple of years and I knew the price of a case of paper or printer toner. As we hired employees, shopping became a delegable task. Thus, I trained employees to maintain a shopping list and to purchase what they needed whether soft drinks, paper, or whatever, as needed. Only when I saw the receipts indicating they were sometimes paying “full price” and ignoring sales, coupons, or even comparing one store against another did I realize that, while it was obvious to me, some employees were clueless about the impact of their careless shopping. If a case of paper costs $5 more at one store than another, that $5 came out of Melissa’s and my pockets, as the owners, not the employees’ pockets. This problem extended to larger purchases, like our first video cameras which were nearly $2,000. For me, it is a no brainer to shop such items carefully for the best price. But, time after time, I have had to push employees to make the effort. In the days when we started Magnus, there was no internet so such things required, of all horrors, that the employees pick up the telephone and make a few calls. Some of our employees would rather make purchases wherever it costs them the least effort, rather than costing the company (i.e., we owners) the least. These employees may be better suited to big companies, but I would suggest that this lack of respect of company assets (money) and company performance is probably more common than realized. In a small business such things are noticeable on the bottom line. All this said, I will add that we currently have a pearl of an employee who seems to understand this concept better than most. While I still work with her as I have with other employees to know how to get the best price, at least I have something to work with in her! A good friend, who was the subject of a blog some time ago, once taught Melissa and me that even goods at retail stores like Macy’s are negotiable, if you ask. This has helped me understand and train employees who are shopping on our clients’ behalf – for hotel/meeting space. The most expensive meeting room for a hotel is the empty room that could have been rented if they had been more flexible on price, or if the employee had asked for a better price. Thus, even when it seems obvious, shop around; this is a training item for a small business. One cannot assume that employees will care enough to shop or be aware enough of relative prices to know to do so.
It is a fact of owning a small business that some employees “get it” and some do not. When it comes to buying things, I always remind Magnus’ employees to look around at everything in the office. Everything, that is 100% of what they see, was bought by David and me. There is nothing, absolutely nothing, in the office that was bought by anyone else. Furthermore, everything we own was bought from money we worked hard to earn; no one gave us anything. Even the purchase of the lowliest paperclip was made possible by the diligence and hard work of David and me, as the business owners. We take nothing for granted and we prefer employees who treat our money as if it were their own instead of those who fritter it away as if it grows on trees. I used to work in a company in which 3 competitive bids were required for every major expenditure. Nothing was approved by my superiors without substantial proof that I, or one of my staff, had shopped around for the best possible price. Taking the time to obtain 3 bids, then comparing them to ascertain which bid met the company’s needs in the most cost effective way, was often time consuming but it taught me to count every penny on behalf of my employer. No one wants to get “ripped off” and that includes David and me, not to mention thousands of other small business owners who closely watch the bottom line. As with everything else in a small corporation, the employee who takes the time to understand the principals’ business philosophy about cost containment will be more suited for longer tenure than the employee who wastes my money. Performing one’s job includes doing things in ways that benefit one’s employer; saving the employer’s money is one of the greatest benefits that can be achieved for the company.