Last week, I gave you investor guru Warren Buffett’s “10 Ways to Get Rich” as the “10 Rules to Success.” Today’s post is a close look at #5 for the small business owner.
5. Watch Small Expenses. In the investment world, this translates into watching not just the returns offered by investment funds, but also the fees charged by the fund managers. This is so true in every aspect of small business and personal finance, as well.
I have found many times where I reviewed what I was paying someone for their services/goods, and found that their current prices have gone down while my contract called for price increases.
So as the year is coming to a close, I would encourage you to have all your vendors re-quote the prices they are giving you. Yes, even if it’s under contract. I want you to tell them that if you find out their pricing is well over what you can get when the contract comes up for renewal that you won’t even give them a chance to work with your company in the future.
Some examples of companies to call on the carpet each year are companies handling your trash, phone, cleaning, dumpster, merchant services, payroll services, subcontractors, interest rates on loans, bookkeeping, uniforms, suppliers and any vendors that you write more than 5 checks to a year. The goal isn’t to pay everyone the least amount of money. The goal is to make sure you aren’t paying someone beyond today’s going rate.
I would also encourage you to always factor in how easy it is to work with the company you are evaluating as convenience, and great service is worth quite a bit of money in my experience.