We’re all familiar with that phrase of British origin that means you may be saving a few pennies in one area, but wasting bigger money in another. But in one case I dealt with, it was more like, “Thousands wise, millions foolish.”
I took over the presidency of an apparel company that was in serious trouble. During this crisis period, we needed to send out a time-sensitive catalog. Sales from this catalog would generate 80 percent of the annual revenue of $65 million for this company within a four-month period. That’s how important getting this catalog printed and mailed out was.
But we needed $25,000 cash immediately to make sure that happened. We had to pay for postage. The company didn’t have it, and there was nowhere else to get that much cash, desperately needed to generate more than $52 million in sales.
The CEO was worth several million dollars. But he froze when I asked him if he could put up the $25,000 to get these catalogs out the door. It was such a no-brainer to me that I was stunned. Because guess who would be wiped out if we didn’t make the projected $52 million in sales from that catalog? The CEO was personally guaranteed on $40 million.
It took all my powers of persuasion, but as we were just up against the deadline, he finally agreed. The good news is he followed my advice after that and we were able to successfully follow our restructuring plan.
So next time you’re tempted to save a few pennies, remember that other famous quote. The Roman playwright Plautus (born 254 BC) said, “You must spend money to make money.”