Cost Control

Yawn. Cost control. Those that have worked with me (or ask my wife) know that this is/was not my strong point. 

But now that I am back on my own I've been discovering the joys of it in some quite life enhancing ways. 

When you're running a company, you don't realise how much of your "lifestyle" is funded by your job. And no, I don't mean abusing your expense account. 

But think about it - I was always in a hurry (or late.) so I'd grab a cab. Taking a client out, a good lunch or dinner for two could top £150 easily. Working late - grab supper on the company. Grab a coffee with someone - petty cash.

Particularly the last bit, which doesn't seem like much, it all adds up very very quickly. I'm working and taking meetings out of a members club at the moment, and at £1.50 a coke that sure isn't cheap. (I've been offered a desk in an office for £7 a day for example). 

So, I've been rediscovering the pleasure of saving money. Today, instead of taking the tube up to my meeting in Marylebone from Charing Cross, I walked it. Took 25 minutes, and I saved 2 quid. But when I bought my coffee - it was "free". I liked that so much, I walked back again.

Now, before this ends up as some pathetic isn't life tough post - grow up David - there is a point to this.

What I'm doing is terrible for the economy. Making a packed lunch means that Shelley's on Dean Street has lost out on £4 of business. The tube lost £4 today. The only beneficiary was Sainsbury's for the packed lunch ingredients, and the coffee shop because I couldn't very well bring in a thermos.

Oh - and a shoe repair company when I have holes in my soles from the walking. (Now there's a booming industry at the moment).

So, in one fell swoop - I helped do my little bit to keep us in a recession. Great.

But then, look back to the paragraph at the beginning. With a company card I was putting a huge amount into the economy every day - lunches, drinks, taxis, coffees.. Far more than I ever did personally.

So, as companies tighten their belts, the first thing they crack down on is expenses. So people, like me, no longer have those expensive lunches, or coffees and take the tube instead of a taxi.

The government keeps asking the banks to free up credit to individuals, but I don't really think this is where the difference is being felt most keenly. I cut back today and took £4 out of the economy. In a company environment, I'd cut back and perhaps take as much as £200 out.

Thats a 50x difference by one individual. Now, I know there are a heck of a lot more people who are going to walk somewhere than there are senior executives, but in London there are an awful lot of the latter.

It's why the government must focus on helping business, and not just the big ones. If a company can't get credit, and things are tight, when it comes to the decision to spend some money on attracting new clients - they frequently (and incorrectly) will choose not to. Which means they turnover less, which means they spend less, which means they turnover less....

You get the picture.

Stuff recapitalising the banks - get some money direct to companies.

Except Cobblers - they don't need it.

David