Avoid Extravagance

Written by Peter van Stralen, CEO Sunshine Brands®

Benjamin Franklin coined the phrase “a penny saved is a penny earned”. He was right. At Sunshine Brands we have a principle that helps to remind us daily of this important business concept.

• Sunshine Brands Principle #9 – Avoid Extravagance: “Maximize financial value without sacrificing quality or efficiency. Do more with less.”

Every Team Member should know how their role helps your company earn money so that they can look for ways to work more efficiently. It is equally important that Team Members are aware of ways to save as well. Remember, you pay tax on every dollar you make but you keep every penny you save.

We recently took a business trip to Vancouver for a trade show. As is our practice, we conducted a daily HUDDLE where we recited the Code of CARE as well as our 10 principles. Daily repetition of our principles keeps them top of mind, and so, as we began preparing for the trade show the principle “Avoid Extravagance” kicked in to play.

Here is how it played out:

• The hotels in Vancouver average $250 per night. After a bit of research we found that hotels in North Vancouver average $130 per night. It may have been inconvenient to take the ferry, but savings were $1,080 for the length of trip and we had an awesome view of Downtown.
• Shipping our booth and materials would have cost us $750. Taking the extra luggage ourselves saved $700. It was a minor inconvenience, but a great workout!

We saved at least $3,500 by making a few simple changes to the plan. We were able to make those savings by “maximizing financial value without sacrificing quality or efficiency”.

It is important that you think things through when “avoiding extravagance”; it is easy to go over board. I read an article recently explaining the difference between being frugal and being cheap.

Cheap says: pay the least possible at all costs.

Frugal says: get the best value, without sacrificing quality or efficiency.

In the Landscape Management business, we are faced with purchasing decisions almost daily. For example; “Should I buy the $50,000 truck with all the bells and whistles, or can I produce the same efficiency or quality with a $35,000 truck?” If the answer is “yes”, you just “earned” $15,000 tax free!

Or you might think “Should I buy a coffee maker for my team, and supply free coffee?” If buy a coffee maker, it will cost the company something up front, but I will have more happy, efficient Team Members resulting in more sustainable long term savings.

Another example is thinking: “Should I bother to repair that rust or dent on my vehicle? If I leave it as is, I will save the $2,000 repair costs”. That might seem to be true, but consider the cost of negative marketing you get from driving around in a rusty truck. What is the cost to your corporate image? Cheap says “keep the money in the bank” while Frugal says “repair the vehicle ASAP, but get several estimates to find the best price without sacrificing quality or efficiency”.

Have fun and “avoid extravagance”!

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