06 Jun Are twizzly pencils bad for business?
Actually I think the correct name for them is ‘mechanical pencils’ – you know the ones that you twizzle the end to get more lead out off them? They usually come supplied with a handy little eraser at the top, as opposed to those simpler pencils, made of wood, that need sharpening all the while.
Twizzly pencils is the name I’ve given to them and I’m rather fond of them.
However, back in my corporate days, I spent a few years working in a business owned by entrepreneur (and multi-millionaire) John Caudwell. (His most well known business was Phones 4U, and he recently declared himself to be the highest tax payer in the UK)
Now the business I worked in was extremely profit driven – some may say to the point of ruthlessness, which meant costs were micro-managed closely.
John believed that a ‘twizzly’ pencil was a luxury item, and not one he would authorise purchasing in any of his businesses for his hundreds of employees.
In fact, lots of ‘non essential’ stationary items were deemed contraband – why should notebooks be purchased when there were piles and piles of scrap paper to be recycled by the printers?
Of course, there were some side effects of being more ‘green’, but the reality was that this was done with a profit focus.
Reduce costs = Increased profit
You may disagree with this style of micro-managing, but the fact is, John Caudwell built several very profitable businesses, is a multi-millionaire, and now heads up a children’s charity as he’s moved in a more philanthropic direction.
At the time I worked for him, the business was already pretty huge, with a multi-million pound turnover and hundreds of staff, but he was always very close to the numbers in the business, and focused on costs as well as revenue.
Now the reason I share this story with you, is not to say – don’t waste money on twizzly pencils!
Rather, to ensure you are close to the costs going out of your business.
Run through your business expenses for the last 3 months, or even better the past year, and you may be surprised at where the money has gone.
The strategic thing to then do is look at what return each expense has given you.
What organisations do you pay a membership fee to? What return has this given you?
What technology have you purchased? Did it bring more revenue to your business or did you buy it because it was the latest thing?
What subscriptions are you paying out for each month but never actually get round to using?
Reducing your costs can be one of the easiest ways to increase your profits, but, only where it’s something that is not delivering a return back in your business.
By the way, I still use twizzly pencils and pay for them out of my own business now. To me, they are worth the few pounds I spend each year. But there are lots of other things that don’t make the cut.
There’s no definitive list here of what you should and shouldn’t be spending on – it’s down to you and what you need in your business.
Just be careful that you’re being strategic about these decisions, and not impulse purchasing. (Check in your drawers for those piles of leaflets you had printed but not used!)