The Basics Of Belt-Tightening
A methodology that pays dividends in the long run
By Ron Ciancutti
A friend of mine does small- to medium-sized construction jobs—he installs driveway fences/gates, room dividers, drywalls and tapes a kitchen ceiling, etc. Most of his business comes by word of mouth. People see his work and ask who did the job. They get his number, give him a call, and he provides an estimate. Most of his work costs less than $2,500 per job.
Courtesy of Ron Ciancutti
He came by for coffee last week. He said he has noticed a pattern since the pandemic. People barter pricing more than before. He gives an estimate, and a potential client says he will get back, and when he does, my friend is told that someone else has offered a better price. If my friend could come down a few hundred dollars, the client would be happy to hire him because he seems very qualified.
You can imagine the outcome. My friend has started to inflate the estimate, so when the customer begins to debate, my friend lowers his price to what he would have charged in the first place. The customer is then willing to pay the “adjusted” price.
Such a game.
But is it? Is seeking a better deal so wrong? Is adjusting the price to absorb the negotiated cost simply a survival instinct we all naturally do?
My grandchildren choose the bigger of two cookies, and run to the biggest gift under the Christmas tree. They know nothing about motive or logic; they just choose the best deal for themselves by following raw instinct.
Now, let’s allow for the honest and “straight up” clients who know the price of lumber or galvanized pipe. That individual may ask for an itemized list of supplies and labor costs. My friend actually prefers this informed customer. My friend can be honest and even discuss potential overruns if something is discovered during the job that will affect the outcome: “Hey, that deck would look beautiful there, but your backyard slopes and in a few years that side could wash out and cause you quite a problem.” The wise customer appreciates this type of input. Don’t we all?
Slowing Down The Decision-Making Process
So, why is this bartering more prominent since the pandemic? The obvious answer is people are guarding their wallets more closely since Covid-19 was accompanied by staggering inflation and escalating product costs, but I think the answer lies deeper. This reduced public presence has brought about a general slowdown of investments, and people are taking more time with their decisions. In short, there is more thinking and less knee-jerk reacting. A few years ago a new car would put a squeeze on any budget, but many consumers went ahead anyway, relying on an inevitable raise or the company’s healthy status in the market. Now, the consumer thinks, “I could probably get another 2 years out of my current car. Do I really want another monthly payment? What kind of safety net do I have in the bank? No. Now is not the time. I can wait.”
Additionally:
That $5 cup of coffee costs about 35 cents when it’s made at home.
That $25 you pay the local kid to cut your grass could be handled by you as part of a cardio health plan.
Membership in one of the bulk purchase stores pays for itself in meat prices alone.
The drive-through oil change business keeps your car maintained and foresees potential problems. Early diagnosis prevents the need for major repairs, and even the most novice driver can make simple repair decisions.
The do-it-yourself haircut and beard-trimming tools on the market cut barber shop visits in half.
Goodwill and similar stores often have merchandise with the original tags still on. A quick look can ease the pain of back-to-school or summer play clothes.
Anticipating Needs
In short, there are many ways to become a budget-conscious client; there is nothing wrong with taking the time to plan savings opportunities. The best preventative measure for continuous savings is anticipation.
Since I anticipate my electric bill, I switch off fans and air conditioners in unoccupied rooms.
I use the dishwasher frequently. Hand washing the dishes uses a lot of water. One collective load daily is the best remedy for that.
I take quick, efficient showers. It makes no sense to stand there in a daze. Ten minutes should be plenty.
My family grows and eats from a bountiful garden, and we can much of the food for the winter.
I look for opportunities to save, too. I found four, battered library chairs at an estate sale and paid only a few dollars. A $3 can of spray paint made them look like new, and they are now the centerpiece of the backyard.
Please understand that I don’t live like a miser, and I never deny my family anything. But it’s easy to ignore saving opportunities; wasting them these days is a luxury that costs too much. Help yourself with that ever-challenging bottom line, and you’ll build some good habits.
Ron Ciancutti worked in the parks and recreation industry since he was 16 years old, covering everything from maintenance, operations, engineering, surveying, park management, design, planning, recreation, and finance. He is now retired. He holds a B.S. in Business from Bowling Green State University and an M.B.A. from Baldwin Wallace University. He is not on Facebook, but he can be reached at ron@northstarpubs.com.