The Dumbest Thing I’ve Ever Done (in My Business Life)
MAY 28, 2010 9:56 AM
I’m not sure why I’m telling this story, but here goes: When we moved into our new shop in 2002, we quadrupled our square footage. So I knew overhead expenses would be going up considerably. Some of that increase was easy to predict, like more rent. Some was not so easy, like how much our electric bill would rise. Before the move, my bill was about $2,000 a month (we have some big machines). Afterward it ended up being about $6,000 a month. That didn’t surprise me much — quadruple space, quadruple lights, quadruple heat, more guys, more machines, etc., etc.
One of the new machines we added when we moved was a very fancy German air compressor. If you don’t know much about woodworking machines, it may come as a surprise that many of them have both electric motors and compressed air power functions. Usually the electric motor drives the cutting or sanding part of the tool, and the compressed air operates pressure cylinders that keep various parts aligned or move some bits in and out of position. Our complex machines require lots of air pressure.
We also have a humidification system, a giant mist-maker attached to the ceiling that blows water intermittently most months of the year. This is necessary to provide stable conditions for our wood, which is very sensitive to humidity changes. (It also stuns visitors who have never seen such a thing — it goes off with a sudden whoosh, and a visible mist falls from the ceiling, as if we are all being gassed.) To power all of this we bought a high-capacity air compressor, which is designed to produce lots of air pressure 24/7 for factories that run multiple shifts. So when we moved in, we got this thing and turned it on and left it running. For the next seven years, I paid an electric bill of about $6,000 a month without even thinking about.
Fast forward to January 2009, when we brought in an electrician to run some wires. One night, he was working late, after my guys had gone home. Eventually, he came into my office to tell me he had finished up. And then he asked me, “Do you keep that compressor running all night?”
I told him we did.
“Do you know that thing uses about $60 worth of electricity every night?” he asked. “What do you keep it running for?”
I couldn’t think of a good reason. We just did it because we were used to doing it. But there really wasn’t any reason not to turn it off when the guys stopped work. The humidity doesn’t change much overnight if no one is there to open windows or doors. None of the other machines were running. It was built to run all the time so we ran it all the time, without even thinking about it.
It only took me a second to do the math: $60/day x 365 days x 7 years = $153,300.
OMG, as they say. At that time I was desperate for cash, so contemplating all of that money wasted nearly brought me to tears. We started turning the machine off when the guys left, and my electric bills dropped to between $3,200 and $3,800 a month. Still a lot, but a lot less than it was.
What’s the moral of this story? Don’t be stupid, obviously. Also, it’s worth examining everything that you consider to be normal to see whether it is also reasonable. But there’s really no excuse for this.
So I’ll throw it out for discussion: is anyone willing to confess to a mistake as dumb as mine?
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