For the explosively successful small businesses, the ones that have an idea so unique and interesting it flares up overnight, penny pinching never really comes into it. Those darling few are more concerned with fending off investors and television interviews. But for every accidental genius, there are thousands of hard-working small business owners that do it the hard way and every dollar counts.
One area where you can significantly cut down on the red ink in your expenses ledger is office supplies. It’s kind of like buying milk – if you just pick some up when you are on your way home at the petrol station or corner store, then you’re going to pay a lot more than if you put in the effort to visit the supermarket.
When it comes to office needs like stationary, furniture, printing supplies, and laptops, a trip to the closest newsagent will likely cost you quite a bit, whereas a trip to the office supplies megastore will cut that bill down. Thankfully we live in the age of the internet, and visiting the larger chains doesn’t require walking further than your computer chair and clicking around the website of your supplier of choice.
Expense Reduction Analyst
Office supplies is an area that David Rounsvell knows like the back of his hand. He’s worked in the industry on both sides of the coin – for 10 years working for the big suppliers and then consulting with Expense Reduction Analysts for their major clients over the last 12 years. According to David, he is the poacher turned gamekeeper.
“Many suppliers stock in excess of 10,000 products,” he says. “By not having a core list, and knowing what those products cost, you can easily buy hundreds of thousands of products at the retailer’s top price.
“Having a core list and getting the supplier to price it will reduce your cost – but then monitor it,” he adds. “One client said we like reviewing our office supplies ourselves because we always get such good results, when actually that means he forgot to manage it in between reviews.”
David likes to have his clients on a 3-5 year review schedule, but mostly he deals with large enterprises with more bargaining power.
“If you don’t have the resources and knowledge, it should be reviewed on an annual basis,” he says. “Most industries are very good at increasing their margins once you are a client.”
Anthony Chapman is a sales manager at Total Office, and he sees a lot of mistakes being made when small business owners purchase goods.
“Some business owners allow their staff to spend time driving to retail outlets to purchase items thinking they are saving money without fully understanding the costs associated with doing business this way,” he explains. “Another common mistake is putting up with poor service from their supplier when they are purely focusing on the price of the goods.”
One of the simple things Anthony recommends is trying out the generic brands of simple stationary items – pens, notebooks, post-it notes and the like. He claims that most suppliers will have over 300 of their own branded products and most of the time they will not compromise the quality of the item being used at all.
“I have been in the office products industry for over 20 years and I have to say that it is a very highly emotive category,” he says. “For many reasons companies get very attached to their office supplies provider and at times put up with inferior service and price to avoid conflict with their staff by suggesting a change of supplier.
“Ask any future supplier to provide you with case studies and references of clients that recently moved to them – as well as clients that have been with them for quite some time.”
David’s top 5
David Rounsvell is a consultant at Expense Reduction Analysts, and we asked him for his top five office supplies tips.
1. Have a core list (list of retail products, and what their rrp is) and manage that.
2. Have an authority to purchase, ie someone charged with purchasing, and make it their responsibility to keep controls in place.
3. Have a look at the brands you are buying. Can you do better with a home brand product? Is there a better value for money brand?
4. Don’t shop around every time. Do it once and do it well and review it every year. I see people spending a lot of time trying to save a couple of dollars. It also doesn’t make sense to save $5 on coffee at Coles if it takes an hour to get it.
5. Double side your printing if possible; it will save you 25% on paper on average.
Anthony’s fast five
Anthony Chapman is a sales manager at Total Office, and he has a number of quick tips
for saving money on office supplies.
1. Have a regular product analysis review of your purchases done by your office supplies company.
2. Ask your office supplies provider to lock in prices on your most commonly used items in advance.
3. Ask your office supplies company to provide a fixed price for all items purchased outside of the standard basket option.
4. Ensure over 95% of all the items purchased arrive no later than the next working day, otherwise a cheap price may soon turn expensive if it doesn’t arrive at your doorstep on time.
5. Negotiate with your supplier as the more items you ask them to provide, such as coffee, tea, toilet paper, tissues and even alcohol, the better bargaining power you will have on your general office supplies.
Ask the expert
Anthony Toope is the marketing and operations manager at Fuji Xerox Printers, and we asked him how small business owners can save on the all-important printing costs.
What are the most common mistakes small business owners make with their printing strategy?
For most business owners little thought is given to printing. Printer fleets will have evolved over time with many old machines being replaced with the latest and greatest devices. What many business owners don’t realise is the impact that printers and copiers can have on their balance sheet and operational expenses.
Before a purchase is made, it’s important to assess the office printing needs and research all the options. Requirements will vary depending on the size and type of the business. For example, there is no point purchasing an expensive high-speed A3 colour multifunction device, when a monochrome A4 single function printer will suffice.
What are your top five tips for saving money on printing?
1. Before making a purchase, carefully research the options and ensure the printer meets the needs of your business.
2. Consider consolidating standalone fax and copier machines to one high-performance multifunction device.
3. Consider a managed print services contract to avoid costs associated with ad-hoc supplies.
4. Encourage users to select print preview and only print pages when needed.
5. Switch your printer default settings to print double-sided and black-and-white.
What are some of the things you can cut down, or buy a cheaper version of, to bring printing supplies cost down?
Paper may seem cheap per page but it adds up across a company. Business owners should encourage employees to reduce the amount of paper used in printing by:
• Printing only what is necessary
• Using the computer preview function to proof read documents carefully on screen before printing.
• Print double sided (duplex) where possible to reduce the number of pages used – this should be set as a default print option where possible.
• Use paper trays to collect single-sided printed scrap paper, which can be used for notes or re-printed on.
Do you have any other tips for printing supplies purchasing?
Running a printer can be costly over time considering the cost of consumables, routine maintenance and servicing. Choosing a managed print service can help manage an entire printer fleet, offering reduced and predictable costs, automated consumables ordering, visibility into print activity and improved staff productivity.
Businesses could also consider choosing a printer which uses EA Eco toner. Due to fusing to paper at a much lower temperature it saves around 20 per cent power consumption and reduces CO2 emissions by up to 35 per cent compared to conventional toners.
What about buying generic refills instead of brand name versions – is this a viable way to save money?
Though they are usually stated as compatibles, they are never endorsed by the brand owners. Such non-genuine toners may save costs in the short term but may incur hidden costs of repairing the machine, lower yields, etc.