I grew up in the middle of my family’s small restaurant/gas station on Highway 301 a couple miles north of Waldo, FL. As a young child, there was always new activity to take in and process. Waiting on tables and pumping gas as well as working on our farm was part of my growing-up experience. I did my homework sitting at one of the restaurant’s four tables. And from my time working in the restaurant and filling station, I watched humanity “come and go.” Particularly, the restaurant was an education in frugality that my parents encouraged my siblings and I to learn from.
One day, a couple came into the restaurant and I could just tell that they had money. They didn’t have that dusty look about them that most of the customers and travelers who stopped by our restaurant seemed to have. They wore nice clothes, along with nice shoes and drove a nice car, all which said to me that they had money. And, when they ordered, they chose the most expensive item on the menu – the fried chicken dinner. No hot dog or bologna sandwich for them!
Our restaurant really didn’t sell a great deal of the expensive fried chicken. Our customers were typically hard working people who kept a tight grip on their money, and a sandwich or a hamburger was the usual order. When this expensive order came in, my mother - who did the cooking - went to the freezer and found it devoid of chicken! This could have been a disaster, but with the grocery store just down the road, this really wasn’t a major problem. Mama and I drove the couple of miles down to the store, bought fresh chicken, cooked it up and no one was the wiser. Even though we always tried to have some chicken on hand, we never stocked much as it would have been quite costly if it became freezer burned. For sure, every penny was precious and we had to insure that nothing went to waste.
The lessons of my family’s restaurant have made me frugal in business. But, I don’t think of this in a negative way - I’m definitely not talking about Ebenezer Scrooge frugality. I’m talking about elegant frugality. This means that you know when not to spend money. It’s taking your ego out of the equation and really looking at what is going to help your bottom line. Here are a few thoughts on ways I’ve integrated elegant frugality in my businesses:
1) Do I really need to keep a lot of inventory? More often than not, the answer is NO! Over the years I have seen many small business owners fall into the trap of buying a large quantity of inventory because they see the big boys doing it and figure they need to do the same. In a small business, this often doesn’t make sense. With carrying costs, product deterioration (no one wants freezer burnt chicken!), and with shifts in demand, it can be more costly to keep a large inventory, even purchased at a discounted price, than to buy what is a reasonable amount that can be sold readily.
2) Keeping overhead low. Because my father had lived through two World Wars and the Great Depression, we were well trained at keeping operating costs low. In many new businesses, it will cost twice as much money as you may initially think and take twice as long for the desired business to develop. There is a wisdom to being “lean and mean.” And cutting that budget may not hurt as much as you’d think. You probably don’t need a fancy office (my first office didn’t have even interior wall board, yet it worked!), and it’s more than likely a high-priced CEO from California isn’t needed, and a smaller, cohesive staff will suffice as opposed to being ‘burdened’ with a larger, more costly one. Remember: Profit = Revenues - Expenses. It’s all about the bottom line and having good cash-flow.
3) Growing a small business doesn’t have to cost a lot of money. Back in our old restaurant, great signage, word of mouth and fun promotions were the inexpensive marketing tools of the day. Into today’s high-tech world, a savvy social marketing strategy can be an efficient and effective way to grow your business without an extensive advertising expense. And, word-of–mouth is even more important as a positive review of your business on social media can mean a huge uptick in sales.
4) Under-promise and over-deliver. Think about what happened with that customer at our restaurant. Not only did they get fried chicken, they got fresh and superbly cooked fried chicken. We exceeded their expectations. And, when you exceed expectations, you usually get more referrals and, in the case of the fried chicken, I was on the receiving end of a nice tip!
Over the span of my business career, I’ve experienced the elegance of frugality. I continuously wipe away the clutter, look at what I’m doing, and think about what is truly the best way I can serve my customer at the least possible cost. Is an expensive office really necessary (and it may be in your business), or is it more important to save part of that expense and use it toward the good of the company and your customers.
Let’s go back to Ebenezer Scrooge. Treating your employees in a Scrooge kind of way is not elegant frugality. Your employees are your company - so treat them well. Just think twice before you add more employees to your team. And this is where I put elegant frugality into play. I will expand someone’s job, get them extra training, and give them a raise before I’ll hire another person. Your employee becomes an even more valuable part of your team, they feel more important to the mission of your company and you’ve saved the money and hassle that an extra employee can bring.
Also, elegant frugality spans beyond saving money - it’s also about how you make use of your time, your spirit and your peace of mind. Elegant frugality can be a big advantage when you are conscience of living a life in-the-moment and making good use of your time. Spinning your wheels, participating in “make work,” wasting time, wasting emotions on things that don’t matter, spending time being stressed or angry are all the antithesis of elegant frugality - they are a negative indulgence that you cannot afford.
Perhaps the most meaningful manifestation of elegant frugality can be in the positive use of your time, your words, your thoughts and your actions. My challenge to you is to find elegant frugality in business and in the other areas of how you live your life. It’s a simpler, more meaningful way to live and a more productive way to do business.