Photo: ©iStock.com/sbayram
The funny thing about running your own company is that everyone else thinks you’re cheap. I remember working for my dad, and how impossible it was to pry a dime out of him. Pete Sr. would only allow the technicians to pump $8 of gas per day. His reason? A full tank of gas would weigh down the truck and use up more fuel.
Dad’s favorite saying was, “Don’t be a day late or a dollar short.” After going into business for myself, I truly believe that only a person who starts his or her own company from scratch can appreciate the wisdom behind his words. That’s why this month’s column is dedicated to those frugal-minded people who watch the bottom line. Here’s to you, Penny Pinchers!
1. A penny saved is a penny earned
Back in November 2015, my column was about a billionaire client who asked me whether she could mail in her payments for multiple houses in just one envelope so she could save 45 cents. The lesson here is that it doesn’t matter how rich you are, wasting money is still wasting money.
2. Avoid bank fees and penalties
You can nickel-and-dime yourself to death on fees, unless you protect yourself. Consider the following:
- Most banks will hit you with a $25 to $35 surcharge for every overdraft check they “clear” for you.
- Banks generally have two or three plans you can join. The smallest plan will cost you $15 per month unless you maintain $5,000 per month in the bank. More expensive checking accounts can run you $30 per month unless you to keep $15,000 in their vaults. Also, you normally get 125 to 150 transactions per month, per account. If you go past this threshold, you will be hit with a 25- to 40-cent fee for every transaction you process with the bank. This includes every check you deposit. Schopen Pest Solutions deposits 80 to 100 checks every day. To avoid fees, I have multiple accounts. We meet the monetary limits in each.
3. Avoid credit card late-payment fees
Credit card late fees aren’t as costly as bank overdraft fees, but you still get hit with a $35 penalty on your next month’s bill. What’s worse is that you could be paying interest on the penalties themselves. Consider the following:
- Credit card interest is like a vampire, sucking your hard-earned money away from you. Pay your bills on time.
- Look into getting a 5 percent (or better) line of credit from your bank. If you have three or four credit cards at 15 percent to 29.9 percent interest, you can pay them off with your line of credit — and save a substantial amount of money.
4. Start negotiations
Don’t be afraid to negotiate with your vendors. I’ll spend upward of $65,000 on chemicals this year.
If I can work with my supplier to get free shipping, I’m going to do it. Typically, most suppliers will cut you deals if you order in bulk. As long as I order cases instead of individual items, I save money. If I order master cases, I save even more.
5. Maintain equipment
Two years ago, a technician lied and told me he changed the spark plug and oil on his power sprayer. Halfway through our busy season, his motor seized up. Repairs cost our company $720 and we had to reschedule dozens of clients. He is no longer employed with us. Having learned from this experience, I now designate one tech for sprayer maintenance. During the winter, he changes the oil, spark plugs and air filters on all of the sprayers.
6. Cull overtime
There are worse things to waste money on than overtime. At least the employee is making the company money. The problem starts when a technician has a lot of “windshield time” driving from one stop to another. At Schopen Pest Solutions, I want my techs to have less than an hour of driving per day. To accomplish this, I work with my programmers to make sure we get our techs from one client to the next as efficiently as possible. Think about it: If a tech works 40 hours per week, he should only have five to six hours of driving. If he drives two hours per day, the company is missing out on at least two additional clients per day— losing approximately $190. We also are paying an additional five hours in overtime at the end of the week. In other words, I could be shelling out an additional $150 for less work being done.
7. Get smart about taxes
Among the myriad taxes I pay, one that really chafes me is to the state of Illinois for worker’s insurance. I have to pay 8.5 percent tax on the first $12,000 that each of my employees earns. This money goes into escrow and helps pay unemployment to Illinois workers. Four years ago, I had to lay off one of my four workers because of a slow winter. The state jacked up my unemployment rates because it considered me to be a “high-risk” employer for losing 25 percent of my workforce. I’m up for re-evaluation this year, though, and I should be able to get that reduced.
There are self-help books and college classes you can take to improve your finances. But at the end of the day, I rely on a strategy attributed to the great Will Rogers: “The quickest way to double your money is to fold it over and put it back in your pocket.”
Schopen is owner and founder of Schopen Pest Solutions, McHenry, Ill. You can email him at pete@schopenpest.com or reach him via Twitter: @schopenpest; Instagram: @peteschopen; or Facebook: Schopen Pest Solutions, Inc.
Leave A Comment