When Canada Post increased postage rates last March, the cost to send a domestic standard letter up to 30g anywhere in Canada became $1.00. A commercial discount was also then introduced allowing meter users to save money on postage. Although commercial rates are increasing on January 12, 2015, postage meter users will continue to save at least 8cents vs. a stamp purchased in bulk – and 23 cents when compared to the purchase of a single stamp. Meter users will pay 77 cents for a domestic standard letter up to 30g mailed within Canada. At first glance, 8 cents might not seem like much. In fact, a discussion about pennies with any level of seriousness may be quickly dismissed by some. I would suggest that there is value in a penny, and even more so as they collect and evolve into dimes, quarters, and dollars, that eventually multiply – and matter.
The fact is, an 8cent CPC discount on that first weight break in domestic standard mail translates to a minimum 9 percent savings for you and your business. People talk with enthusiasm about getting 1 or 2 percent cash back on their credit card purchases. They know it adds up.
Benjamin Franklin got it right when he said: Beware of little expenses; a small leak will sink a ship.
I reached out to small business advocate and blogger Brian Moran for his thoughts on the power of the penny. “Talk with any business owner,” he told me, “who went through the recession and came out of it still in business, and they will tell you they felt the impact of the little expenses. An overwhelming number of small businesses are probably a little worse for wear because of what they went through. Credit lines are tighter. The room for error has gotten a lot smaller.”
“In the past,” he added, “growing your business meant just increasing sales. That’s the offensive part of your game. Expenses are the defensive part of your game. So, now, here’s an opportunity to reduce your expenses and to play better defense.”
Big expenses, like rent, monthly fees, and taxes, are line items you’re sure to factor in your planning. It’s the small expenses that add up quickly. When you put all those small expenses together, they often add up to more than the big expenses. “To Franklin’s point,” Moran added, “beware of those little expenses because they do add up – especially the variable expenses.”
I’d be lying if I said a penny didn’t matter a lot to me at least at one point in my life. Years ago, shortly after I married, bought a house, and had a child, one of us lost our job. Our income was abruptly cut in half, but our bills were not. I can remember challenging each other to see who could spend the least cash in a week. I can’t recall how little the winner spent. I want to say it was something like $11.60 or so. But, I do remember my husband won. (Not the biggest surprise in our household.) Little things added up, like cups of coffee, lunch out, and impulsive purchases at the grocery store. Every penny counted.
And, then I thought of the ultimate authority on penny pinching. Perhaps the foremost frugal billionaire on the planet, Warren Buffet, with whom I have had fascination with ever since I learned that he makes his primary home a house in Omaha that he bought in 1958 for a mere $31,500.
In the Roger Lowenstein biography Buffett: The Making of an American Capitalist, he explains that whether assessing large investments or buying everyday items, the man who sits currently at #3 on the Forbes Billionaires list has always been driven by the notion that small sums compound. His philosophy? For every penny that you don’t spend unnecessarily, you have more money to invest in the future or spend on something more enjoyable, like a vacation.
And so, a penny for your thoughts?