False Economy

It’s a basic rule of accounting that a penny saved is a penny added to the bottom line, but an additional penny in sales doesn’t mean much. After all, once you deduct costs, depreciation, golden parachutes, advertising, attorney and consulting fees, it’s all gone. So when businesses think they are cutting costs—do they?

I’ve seen:

Water pressure cut to toilets to save water. Unfortunately, everyone uses five to ten flushes to—you know—so I doubt there’s any savings.

Paper towel dispensers are set to yield six inches of paper towels, so everyone automatically goes for three or more helpings of paper towels.

In an environment in which people have to use the provided plastic flatware, using ever thinner stock, so that everyone takes two or three of every utensil because they know the first one or two will break.

With a little thought, there could be cost savings; with no thought, not so much.

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