Your business is probably losing money every day and you don’t even realize it.
No. I am not talking about employees who are secretly robbing you.
It’s something that’s more innocent than that, but just as financially draining on your business.
Let me explain what I am talking about by sharing a story that I came across.
The Railroad Magnate and the Railroad Track Bolt
One day E.H. Harriman, the railroad magnate, was walking along the tracks with an assistant.
Looking at a track bolt, he turned to the other man and asked, “Why does so much of the bolt protrude beyond the nut?”
“I don’t really know,” said the assistant. “Except that it is the size we’ve always used.”
“Why should we use a bolt of such length that a part of it is utterly useless?” asked Harriman.
“Well, when you come right down to it, there is no reason.”
The two continued walking along the track for a moment, then Harriman asked how many track bolts there were in a mile of track.
He was told.
“Well,” said Harriman, “we have thousands of miles of track, and there must be some fifty million track bolts in our system. If you can cut an ounce from every bolt, you will have fifty million ounces of iron, and that is something worthwhile. Change your bolt standard!”
The Overlooked Way to Increase Your Profits
Many business owners are focused on increasing their profits by making more money.
But some of those same business owners overlook the opportunity to increase their profits by saving money from “changing their bolt standard.”
I would bet that it’s not the huge areas where you’re losing your profits. You’d notice those types of loses.
It’s probably the small, neglected areas (the “bolts” of your business) that are “nickel and diming” away your profits.
Those are the areas that are so easy to miss.
2 “Bolts” to Focus On
What are some areas where you can start looking for “bolts” to cut?
Try these two areas:
1. Time – Look for small ways your business is wasting time.
- Can you shorten your meetings or eliminate some of them completely?
- Are there other areas that you or your employees are focusing too much time on – things that don’t bring in any actual money? Figure out how you and your employees can spend more time on profit-generating tasks.
Saving a small amount of time spread out over a large amount of people could help you save a good amount of money.
2. Effort – Look for little ways that effort is being wasted in your company.
- Are there more efficient ways you or your employees could be doing your daily activities?
- Are there ways you can improve your marketing? Did you know a small change in an ad title can increase your profits by 300% or increase your click-through rate by 15%?
If you can cut out wasted effort across the board, then you’d see a nice increase in your profits over time.
Those are just two places to get you started.
But you will need to think like a detective to find others.
One other way your business could save money is to ask your employees. They probably see a lot of the waste that you miss. (*You could even offer a financial reward to the employee who helps your business discover the biggest area of waste.)
The key is going to be to get out there and start looking for them like E.H. Harriman did.
Just imagine how much profit he would have wasted if he didn’t get out there and walk the tracks?
You need to do the same thing in your business.
Best-selling author, Robert G Allen, said it like this, “If you don’t value money, you won’t make the effort to control it. If you can’t control it, you won’t be able to save it.”
What Other Areas Should Business Owners Focus On?
If you have any other areas that you’d suggest that business owners focus on to help them save money so they can increase their profits, then post them in the comments.
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