Introduction

Running a business is complicated. Not only do you need to get the best deals from your suppliers, you must also offer services or products at a price low enough so customers will buy from you rather than your competiton. In order to offer the best prices possible, you need to keep business expenses low. While most businesses  identify supply and labor costs as areas that can be targeted , other areas, such as taxes, employee turnoover, and late fees, can add to cost but are not as obvious.  To minimize overhead it is necessary to examine everything  that adds to it and identify the ways they can be reduced or eliminated.

Supply Costs

Perhaps the most obvious business expense is supply costs. Supplies can be raw materials that you use to manufacture your products or supplies you use for your general office use. To get the best deals on supplies you need to look at how you get your supplies, how much they cost, what alternatives are available, and how supplies are used.

As a former inventory manager I know that office supplies are perhaps the most abused and wasted business resource that businesses have. The problem is that most employees take for granted that office supplies are readily available for them to use, and they are under the impression that office supplies are relatively inexpensive and therefor it is alright to abuse their access to the supply. This mentality, unfortunately, leads to office supply waste, abuse, and misuse.

Office supply waste occurs when employees don’t utilize the full life of an office supply. For example employees lose pens frequently, they write only a sentence or two on a full sheet of legal notebook paper and then throwing it away, or they use more adhesive devises then are needed. All of these examples occur in most offices. So what is the big deal about your employees wasting office supplies? Well the bottom line is, is that it is costing you money. To think of it another way, they are wasting your profits. To illustrate how even marginal wasting can cost you in the end let’s examine a single employee’s potential for waste in a month, then multiply that cost by 12 to get an annual waste expense, and finally multiply that sum by how many employees are in a small business.