Mistakes are Dumb—But Only if Repeated

Bill McCurry

At McCurry’s, we’ve made some stupid mistakes. They weren’t that bad really, but look at where we totally wasted money and you can learn from our slip-ups. While understandable, they were frightfully expensive.

One great thing we did was to generate a list of random numbers between 1 and 1,000. Each month we picked five numbers. They became the last digits of checks we intensely investigated to reduce costs. Here are some highlights:

Garbage: Multiple locations meant multiple garbage companies and bills. When the Random Number Method selected one garbage company check, our controller investigated every location to better understand the expense. She looked at combining contracts with nearby garbage companies to save money. Shockingly our smallest store, which we’d bought the previous year, had the highest garbage bill. Turned out seven years before the store had been remodeled, a 20-yard dumpster was ordered and never cancelled. When we took over the location, we kept the store manager who had approved the same invoice since he was hired five years before. We were overpaying by $300 a month! When we cancelled it, our neighbors complained. That dumpster had become the area’s “free” garbage collection. We downsized to a 30-gallon can with a locking lid.

Telephone/Communications: Our telephone bills audit was almost as bad. We found three disconnected fax lines still being billed to us. Also, we were paying rental fees on a piece of one-time high tech equipment we could buy economically. Credit card machines were also a drain. Consider using mobile/Internet access rather than phone lines. Buy, don’t rent, your terminals. Encourage customers to use debit instead of credit cards.

Shipping: We found a company to audit our FedEx and UPS bills. They got half the money they saved us. They found numerous “overnight” deliveries that weren’t delivered on time. We got full refunds. The bigger lesson was to consider how many of the “rush” deliveries could have shipped more economically. How many of them were documents that could be emailed or electronically delivered?

Company Credit Cards: Carrying a credit card simplifies impulse buying. We cancelled all company credit cards and beefed up petty cash so we could instantly reimburse any authorized expenses. Dealing with petty cash made many “urgent” expenditures too much trouble. We didn’t refuse any requests, but the requirement to get cash before or after the purchase provided just enough resistance that most employees found it easier to pass up the “must have” item they previously charged on the company’s card.

Leasing: At one location, CAM (Common Area Maintenance) charges were added to the rental payment. When a new landlord took over a long-term location, the CAM costs rose dramatically. Seems they “re-measured” the location and wanted us to believe our prior billings were all based on “bad measurements.” We argued monthly, but continued to pay the CAM set by the prior landlord. Every two years, we looked at locations as “new,” checking the neighborhood and local growth. This area was “maturing.” When the lease was up we moved, withholding $20,000 in bogus billing. We held our ground and never heard another word.

You’ve heard, “A penny saved is a penny earned.” Look at your expenses. Are there bills that are incorrect or no longer relevant? There’s money to be redeemed in the least likely places. Don’t let the cash slip through your fingers. You can work your heart out to sell an additional $100 in green goods—or cut your needless expenses by $50 with the same result. Remember, “Whether from increased sales or reduced expenses, profit is what happens when good management pays close attention to every opportunity.” GP

Bill would love to hear from you with questions, comments or ideas for future columns. Please contact him at wmccurry@mccurryassoc.com or (609) 688-1169.