I’ve been a landlord for almost 40 years. One thing I frequently see is other landlords that are too complacent and comfortable with their vacancies.
A vacant apartment is revenue that fails to come in. It just disappears with no thought or action required. It’s a little too easy.
If you were writing a check every month to a plumber for $1,000 to address a pipe that never stopped leaking, it wouldn’t take long to get tired of that charade and do something about it.
As an aside, you know I’m an old guy when I talk about writing checks. Some young people have never even seen a check before and wouldn’t know how to fill one out. Maybe I should be saying you should send Zelle funds for the waste. And there’s so much fraud that some experts have advised small business owners not to mail checks anymore. That’s a topic for the next blog post.
Getting back to the problem at hand, I had a client that was considering the purchase of a small apartment building. The client owned a portfolio of apartments with too many vacancies. He had more vacancies than there were apartments in the building he was considering buying. I discouraged the purchase – “just fill the apartments you already have,” I told him.
The point is, waste is all around us. But we’ve become so accustomed to it that we no longer notice. If we had to write a check for it, we’d notice.
At least sometimes, it’s hard to control revenue. New customer acquisition can be expensive, time consuming and unpredictable. Selling more to existing customers can be much easier, but also not guaranteed.
Waste is something we can control and the revenue reward is immediate.
Henry Ford had this to say:
“From time waste there can be no salvage. It is the easiest of all waste and the hardest to correct because it does not litter the floor.”
If you had to write a check for the time waste, then it would be known how much it was costing you and the attention to correction would be much higher.
Before his days as a steel baron, Andrew Carnegie at 24 was the superintendent of the western division of the Pennsylvania Railroad. To keep the trains running on time, Carnegie ordered that the freight cars from a train wreck be burned to clear the line. In other words, the potential loss of revenue from the line being blocked surpassed the value of the freight cars that were destroyed.
No one had to tell Andrew Carnegie about writing a check for his lost revenue or wasted expense.
What are the unnoticed areas of lost opportunity in your business?
We’re all in agreement then that waste is bad and writing a check to pay for our lost opportunities might be a fresh way to draw attention to the problem. But there’s more to it than that. Waste is so insidious that even productive endeavor can be prone to waste. Come back next time to see why.
Click the red email button below to get 15% off How to go to the Super Bowl for Free and Other Lessons from a Lifetime in Business when the book becomes available.
Image by Freepik