Eliminating Waste Using Lean Concepts for Small Businesses

Lean Manufacturing, and Process Improvement are essential methodologies used by large corporations when eliminating waste from their processes. Learn how to apply the same philosophies to optimize productivity and eliminate time waste from your small business.
From task switching to fax machines, Matt & Brandon talk about the best ways to eliminate waste from your business and how these process improvements can help you to create a lean and efficient business that will save you time, effort and money.
So take what you learn from this AutomateMySmallBusiness.com podcast episode, and start eliminating some waste from your business today!

Podcast: Play in new window | Download

Links from the show:

• Lean
• Toyota
• Quickbooks
• Waterfall
• Freshbooks
• Maxemail.com
• Bamboo
• USAA
• Chase
• Myintervals.com

Transcript:

Welcome to Automate My Small Business where we show you how to set up and run your own automated business on the cheap. So get ready to take back your life and add a little spice. It’s time to build something automated.

MATT: Hello and welcome to episode #8, Automate My Small Business. I’m Matt.

BRANDON: And this is Brandon.

MATT: And today we’re going to talk about eliminating or optimizing things out of your small business but before we get into that, Brandon, you’ve been off in Paris enjoying the good life. How you been?

BRANDON: Yeah. I’ve been good. Just got back from Paris. I little jet lagged but I spent a week in Paris. Did that before we had our second baby, my wife and I and before we could ride off life to no more social experiences for awhile because you know that’s how parenting is. But yeah, I had a good time and knew that the business was kind of working on its own. Had no worries about you know anything falling short because like we do, we make it automated so it kind of runs through for it myself too, so…

MATT: That’s great. Well, you inspired me so I didn’t work either. I took some time off and I relaxed. I went to a US Sea Game, got to see them beat Oregon State so that was great. Had lunch and dinner with a bunch of friends and was able to kind of talk about my new idea and get some feedback from some people that are really experts in the field and so that was good.

BRANDON: Good. So we’re down to the 4-hour workweek, literally now.

MATT: I don’t even know if I work four hours this week.

BRANDON: That’s good too. You need that time sometimes but good, so what are we talking about today?

MATT: So today we’re going to talk about eliminating things from your business and as part of the research that I did for a new business, I learned about this new technique or it’s new to me. It’s been around since the 1950s, I think. So I guess it’s not that new. But Lean processes basically growing out of the Toyota manufacturing process in 1950s. But they have this set of Lean principles that really kind of optimize and eliminate waste from your business.

BRANDON: This is a good topic because it got real popular in the early ‘90s but it’s kind of evolved since then. I think there’s a lot—any business owner can learn from this kind of business philosophy if you call it that.

MATT: Yeah. I think what’s interesting about it is that it really start out in manufacturing and you know so a lot of the terminology and things are very manufacturing specific. But it’s been adapted the whole bunch of different types of businesses. So the book I found was specifically like Lean for software development and so they taken all these principles and adapt them over to software development. But this has happened for a ton of different business types so I thought that it was really interesting and I’ve learned a lot. So I want to kind of talk about that and I thought it might give some structure to the things that we want to eliminate out of our business. I know we’ve talked about some of these before you know the eliminate, automate, and outsource. We’ve gone into outsourcing and we definitely talk about automating all the time with all the different tools so I want to kind of refocus back on the eliminate side of things.

BRANDON: Right. So the basic premise here is that anything you can’t eliminate, you automate. And anything you can’t automate, you outsource. And really they all kind of overlap too because if you say you’re outsourcing your bookkeeping, in essence, you’re automating that because you don’t have to do it and in essence, you’re eliminating it because again you’re not doing it so they all overlap in some fashion.

MATT: And even within one process like bookkeeping, you might be automating some of that by using Quickbooks which may do a lot of calculations and you know it covers for you and outsourcing it to someone who’s actually entering all that information so the same process can use multiple ideas from each thing.

BRANDON: Exactly. So what are the main columns of information we’re looking at here for the Lean process?

MATT: So the Lean process really has seven types of waste that it wants to be eliminated. So we want to eliminate defects, overprotection, transportation, waiting, inventory, motion and over processing. And as we go through these, we’re going to kind of take what that manufacturing term says and try to reapply that to what a small business might experience because we’re not going to experience the same things that Toyota has experienced so let’s start out and look at defects. I think that’s one that maps really well to a lot of businesses so if you’re a product business, defects in your product are going to introduce a lot of waste into your product. Brandon, do you have anything you want to talk about on this?

BRANDON: Yeah, you know, defects are always going to be there and if you drive yourself crazy trying to eliminate each and every one of them as you go, you’ll never going to have a product shipped. So there is some part of you that has to kind of accept certain level of defects despite maybe the perfectionist in you. But yeah there’s a lot to know about feeling that that certain amount is okay to have.

MATT: Like that’s kind of the mentality that all of us went through and you know that’s some might really focus on fixing it, some might let go. You know after reading this I think you know I might have changed my mind about that. So defects in a process often lead to more defects and more cost later in the process if you don’t fix them. So one of the things that Toyota did that I thought was interesting was they were willing to like stop the whole production line and if someone saw a defect in the manufacturing line, so that if something was wrong in the frame, it didn’t wait and let people keep putting stuff onto that frame and the interior and everything and then realized all the way in the other end of the assembly line that there is something wrong and they have to undo all that stuff. So fixing defects immediately was one of the things that they said was really important. One of the other things that I saw from a podcast that I thought was really interesting was fixing the causes of defects at all levels. So the example that I heard someone say was in a software product, they were deploying out to the web and they deployed out and they released it, their software product and it crashed and took down the whole site. That’s why did it happen? There was a glitch in the code and something happened. It took down the server. So you know lot of people “say, okay, let’s fix that glitch” and that was it. But if you ask yourself why did this happened at a bunch of different levels, you kind of get to the root cause of things. So why did it take down the server or why was that glitch in the software? Well, because someone used an API called it is no longer used. It’s not supposed to be used anymore and that’s why that one call took down the server. Well, why did they use that? Well, that person is a new employee and they hadn’t done the training. Well, why didn’t they do the training? Well, the manager didn’t think it’s important to do the training. And so once you start out with a system failure it ends up being a process failure. I thought that was a really interesting example that I heard. And one of the things they said is make a proportional fix to each level so if you spend an hour fixing you know one thing, fix that problem in each level for an hour. And as you do that every time, you accumulate that fix. And if something’s happening a lot, then you fix the very, very root cause.

BRANDON: So you’re saying that they would do incremental fixes so that it wasn’t going to shut down the whole company to fix this one problem but keep the assembly line going or the production going while they do this incremental fix.

MATT: Well, fix the problem in hand but also fix like you know why did that problem happen, right? So if that person needs training, spend some time training that person. If you need to talk to the manager then say improve the importance of training, then do that too. I really liked that idea because you know if you really just say, “hey, training is important. We’re going to go spend four months doing training, well, then you really not going to do anything.” But as you build up and as you hit problems that are training specific, you’re going to add more training and add more training and so it’s going to cumulatively build up to the things that are really problems.

BRANDON: So how does this relate directly to, say, a small business owner?

MATT: So I mean especially when I’m working with people and I want to figure out if they made a mistake, if one of my employees made a mistake, why did they make that mistake and is there something that I’m doing or something that my process has that needs to be fixed because of that? So that I can look back from mistakes that are getting made from my employees and looking back to how do I improve the system or how do I improve how I’m communicating with them, that helps out and will prevent future defects.

BRANDON: So the next one is over production and over engineering?

MATT: Right. So we’re both engineers and you know we like building products and we like putting a lot of features on those products but you know you can really introduce a lot of waste into your product with the time that you spend to build that, right? If it’s a feature that’s not needed or something the customer doesn’t want. Do you have any experience like have you ever added a feature that maybe you spend a lot of time doing and … ?

BRANDON: Well, yeah, it’s funny that you mention that because you know with the dog product I designed and developed, I spent months trying to make the ultimate premium version you know and it turns out that the number one seller is actually the more basic standard version. And it’s lesson learned where you think that you’re spending all these quality time trying to make this perfect product and over engineering it and over designing it and over thinking it really. And then it turns out the customer doesn’t want it at all. They want the standard basic version because it does what it’s supposed to and you know that they were only really looking for a particular need and solution for that need. So yeah, there’s definitely an over engineering bug that can set in.

MATT: Yeah and I think you know as the creator of product or the creator of even a service, you’re always trying to make it better. You want to add just that one extra thing that’s just going to make it perfect product. It always reminds me of a great quote that is “Perfection is achieved not when there is nothing more to add but when there’s nothing left to take away.” You know I think that really sums up what this is all about, right? You want to do just enough to meet the needs and you don’t want to put superfluous features in or add more things to your product or spend more time engineering than you need to.

BRANDON: Yeah, 37 Signals is a master of this.

MATT: Yeah I think they’re really good of example of just building the minimum set of features and not adding a lot of bloat to their software but I think you could see this all over the place. I think there’s a lot more bad examples out there than are good examples probably.

BRANDON: That’s true.

MATT: I think there are probably about a lot of things where there’s these five things I really like about those product but these are the things I could care less about and you know that’s waste. So if you don’t have to have your company spend the time doing that or building those things on your product or services that you’re offering that you don’t need to, then that’s the things that you can fix. So another part of this over production, over engineering is optimizing the whole system, so looking at your whole business and trying to optimize things. I think as small business we really have an advantage over some of the big businesses with this because as you start to departmentalize and get people there specialize in different things, people start optimizing their world and not seeing how that kind of affects the whole system. So I mean I think a good example of this is if you’ve ever heard Amory Lovins. He’s built this kind of ultra light car that kind of a model for what our cars could be like in place of like you know the hydrogen or fuels up car of the future. He’s gotten the same gas mileage by just building the whole thing out of carbon fiber and just making it more optimized as a whole system. But what he found is that as he lighten the car, you know, he didn’t need the strung of door hinges and he didn’t need this big of a motor and the wheels can be designed differently and all these things changed that were really like, I’m sure the breaking system, the wheel system is really optimized for what it did but if you make a system wide change you can really optimize everything. So I mean if you look at your sales and your marketing, and your product and your fulfillment, if you look at that all together and see how you can optimize together, I think you can reduce waste across processes.

BRANDON: Yeah, I think when you look at your logistics you know if you’re going to make the product here in the States and you’re dealing with a lot of short term quick fixes and then once you decide well, maybe I want to go overseas with the product, you’re going to have to redesign the entire operations of your logistics and your production and your distribution and how to get everything working and synced and so sometimes you have to step back and look at the whole and kind of redesign, re-optimize which in some cases it’s kind of a reinvention of your entire business and you might end up reinventing your business model couple of times just because you’ve hit certain growth points.

MATT: I think that’s a really good point because if you just fixed the fulfillment part so that you’re suddenly delivering overseas, you’re not going to address the sales staff and you’re going to introduce problems onto other parts of your business model unless you take a system wide approach.

BRANDON: Right.

MATT: I think it’s a really good example. So one of the next areas of waste is transportation. And in the manufacturing world this means like building parts on one part of the world and moving it to another part of the world and that’s maybe kind of cheap for some small businesses but I think even more importantly is handoffs between in place. So like having one worker work on something and then hand that work off to another worker. We talked about this in the Waterfall model that you lose knowledge as you try to do these handoffs and you lose efficiencies but another place is emails you know. As you send emails and you’re waiting for emails and that’s just all waste of time and waste of effort if you’re not making your emails clear.

BRANDON: Yeah. It’s amazing how many people send emails that are half assed you know and all it does is just bother the person that’s receiving the email because they don’t understand the communication and it upsets the person sending the email because they don’t get the correct response back that they’re expecting so you know emails are an art form in some cases because it came from you know writing letters and you know that used to be a very formal communication. And because we have so many emails coming in and so many going out these days, we kind of forget the importance of correct grammar and complete sentences and all complete communication and sometimes just taking an extra minute to maybe make a checklist that maybe you need to communicate instead of quickly just assuming that your recipient understands what you’re saying. It makes all the difference in the world.

MATT: Yeah, one thing I do when I send emails, I try to reread the email before I send it and say what questions would I ask if someone sent me this email, and then I try to add those in the end to address you know whatever first question someone might have so really trying to make your communication clear. This is especially true when you’re outsourcing stuff to other parts of the world where our English communication is imperfect even more imperfect than it is in the US, right?

BRANDON: Right. And I’ve always found that an extra minute of careful editing of an email going out as time well spent because it comes back to you.

MATT: Yeah, definitely. And that ties in a lot with our next step of waste which is waiting and delays. So you know a lot of times if I’m working on something and I don’t know exactly what I’m supposed to do next, I’m going to send out an email and I’m going to wait for someone to get back to me or I’m going to make a decision that might be a bad decision. So what are some techniques that you use to try to reduce that waiting or getting answers back quickly or making sure the people already have the answers that they need?

BRANDON: Well, I like the fact that we’re outsourcing a lot of the time to countries that are on different time zones. I constantly am trying to figure out what would they be able to work on while I’m sleeping and what would I be able to work on maybe you know that they need me for something while they’re sleeping because you can essentially double or you can think of it as having a 24-hour work day by, let’s say, you outlining a certain task in a project and then your outsourcer completes that task while you’re sleeping and then by the time you’re up the next morning, you can review their information and make edits and make comments on which would take time and you are essentially having a 24-hour work day. So yeah, there’s strategy to that and if done well can increase your productivity fantastic amounts.

MATT: Yeah. I think it’s a great way to eliminate delays. I think that’s a really good example but it also drives home the point that if you’re communication is imprecise that those people are going to be waiting for their whole day until you wake up to answer these questions. So there’s a lot of potential for waste there and so again making sure you’re very clear in communication is going to help you again with this type of waste.

BRANDON: Yeah. Very true.

MATT: So the next type of waste that Lean covers is inventory. And if you have a product business this might directly relate to you as a small business. If you order 10,000 of your type of product and it’s sitting on a warehouse while you sell a couple of hundred a month, well then you wasted a lot of capital that’s sitting there and they could be doing something else. And we all know that as a small business, cash flow is very important. So having cash that is inaccessible that’s locked up in inventory is a really bad thing.

BRANDON: Yeah I think it’s smart to take inventory no pun intended but take inventory of your parts and see which ones are expensive, which ones take the longest to get and plan, strategize you know. Do I really need to buy a month of these expensive parts or can I wait to the last minute and knowing that they can get to me overnight and therefore I’m keeping my cash in the bank and not necessarily put it out there so quickly?

MATT: Yeah this is something that I did as I was starting out was my electronics product had one part that was over 80 percent of the total cost of the goods, and so what I did was I used economy’s scale to manufacture a lot of the rest of the parts and then I would just in time order the really expensive part and then install that and you know I’d have a final product. But that allowed me to keep the amount of cash that was locked up in my inventory very low and you know keep more cash flow for doing other things like marketing and advertising and building the business.

BRANDON: This also applies for different sized parts. I actually do the same technique when trying to figure out when to order small parts versus large parts, you know, it spaces money also. And you know any warehousing you have in my case, I pay per pallet that I use in the warehouse with the fulfillment company that I have so something that I ordered that I need let’s say 500 pieces of, if those 500 pieces take 5 or 6 pallets to put in the warehouse, I might not want to order those all at one time whereas if they were very small pieces like the size of quarters or nickels, I could get 10,000 of those and they would all go in the box you know. So similar in the you know you don’t want to throw all your money into expensive parts, the same goes for you don’t want to throw any money into large parts that takes up a lot of space. It kind of goes hand in hand.

MATT: Yeah I think another type of inventory that we don’t typically think about is the work that we’re completing, right? So as you’re building up an information product or with my stuff, building a software product, all that work that we’re doing is inventory at work and until we ship it or release that information to the public as a product, it has no value. That’s an inventory at work so I thought that was interesting when you looked at stuff that you’re working on. If it’s partially completed, it’s inventory until you finish it. So it’s an advertising campaign or a marketing campaign if it’s not done it’s work that you’ve done that’s wasted.

BRANDON: Right and you know a lot of people are familiar with batching their tasks which kind of falls into what we’re going to talk to about next but you know if you’re going to build the part or build out a set of parts, you’re going to want to do them all similar task at one time and not do multiple switching of tasks throughout that building of the process so…

MATT: Yeah. So great segway until the next type of waste which is motion. And inside of manufacturing contact this is walking from one side of the manufacturing floor to another to do different task. In our world, this is just really you know switching task. And so switching tasks often leads to do the partially completed work that we talked about on the last one. I think we’ve talked about this in a couple of different podcasts of good strategies for minimizing this especially with the Getting Things Done techniques and some of the Scrum things we talked about in project management of focus on a small number of tasks, make sure you have everything you need as you’re going to do these tasks and don’t try to do everything in the whole world, right? You know make sure you’ve a defined scope at what you’re trying to work on.

BRANDON: Yeah, and set limits to what you want to achieve in a particular time. Don’t try be everything to all people at all times you know you’re just going to run yourself thin. So if you have a few ideas let’s say three tasks that you want to accomplish in that day, and those are the three tasks that you focus on. You’re not looking at a list of a hundred things.

MATT: Yeah and really focus on one at a time. And you know also at the personal productivity we talked about not letting yourself get interrupted with emails and stuff so try to focus on something. Don’t get distracted. Work in a place that you’re not going to be interrupted you know. If you’re working from home, close the door, and whatever it needs to do to like minimize those distractions.

BRANDON: Yeah, you’re going to want to eliminate and Tim Ferris is a big proponent of this but a few others also that you know eliminate that little toaster pop up that comes up on the side of your screen when the email comes in. You don’t necessarily need to have a reminder for every single email that comes in. In fact, many people say that that alone is the number one productivity tip they’ve used and find the most useful. They seem to capture new hours of time everyday that they didn’t know they had just from that one tip.

MATT: Yeah. And so the final type of waste that we have is over processing or unneeded processes and this is really doing more than what you need to do to accomplish the task at hand or offering services that you don’t need to offer. One of the most interesting ways that I think I’ve seen this reframed is eliminating needy customers that you don’t want to serve or they’re taking more of your time than they’re worth to you. Tim Ferris talked about this on his book that he didn’t offer one day shipping because people that needed over night shipping were the most needy customers. They’re more likely to call and complain and ask about where their order was and just use up a lot of resources. I had a friend that offer services and screens their customers so they might say you know, “hey, we have an appointment for services today and it’s temporary we had a cancellation. You can come in this one time and we’ll let you in.” And then they actually use that time to kind of judge the customers and see is this going to be a good person to work with or are they just going to like take a lot of our time and then based on that, they’ll either accept them unto their business as a customer or they’ll put them on a wait list or kind of nicely say, “hey, we don’t want to work with you”, right?

BRANDON: Yes, seems like anybody normally would say, well, you don’t want to turn away business. You want to have as many customers as possible. Well, that’s not necessarily true.

MATT: Yeah.

BRANDON: If these customers are taking 80 percent of your time up, it’s the 80/20 principle, you can shed those 20 percent of customers that are taking up 80 percent of your time and be better off because of it. You know some people say, well, you ought to take all forms of payment. Well, that may not necessarily be true. Just because somebody wants to pay by check over your website, yeah, there’s probably five percent of the customers out there that want that but by having that option, now you’ve increased your overhead and the process level goes up and you’re just complicating a lot of things. It’s not necessarily better to have that extra five percent of the customers out there.

MATT: Yeah, it’s really challenging to think of customers as something you want to get rid off or that you may want to get rid off. But I know looking at different customers that I’ve had, there’s definitely ones where I went, “I’ll give you a refund. I don’t want to talk to you more. Go away.”

BRANDON: Right. Yeah, absolutely. You’re right though, that one day shipping is interesting. I didn’t realize that Tim Ferris did that. I only offered ground shipping for the same reason, knowing also that it would be more expensive than they’re willing to pay but if they went over air shipment or anything like that, but for the same purpose you end up getting those types of customers that are calling you five times a day demanding why isn’t it here why isn’t it here. I thought you said you did this on one day and you know what, forget it, we’re going to five days.

MATT: Exactly. It’s better to under promise and over deliver than risk getting that one day shipping not there right?

BRANDON: Right.

MATT: Another way I saw this one was not forgetting the mistakes that you’ve made and learning your lessons from those so over processing can also be spun as making the same mistakes over and over and over again. So capturing the lessons that you’ve learned and putting them somewhere where your whole company can learn from them. We’ve talked about putting up the Wikis, and making videos, were some of the ways that you try to learn from the mistakes that you’ve made, Brandon, and make sure that you get better.

BRANDON: I use the Wiki, I use Google sites as a free way of doing that. I like the ease of use and the fact that it can be used by all people across your company if you have multiple outsourcing sources to fill information as they learn it. And then just to keep documented information you know as you go. It’s an easy way to do it. It’s available to everybody. It’s paperless. There’s only one thing I still use paper for, I do keep a paper notebook with me just to jot ideas down as on the go. But everything else is pretty much digital and it’s important especially when you’re trying to capture ideas that you learned over the course of the project to have it digital because it could be searchable and overtime it’s going to just get larger and larger and the paper base system is just not going to be useful over time so I think it’s important to keep it digital.

MATT: Yeah. I think that same thing is true for the learning of your customers, right? So you know creating a frequently asked questions and having a forum where they can go and search all the mistakes that other users have made and learning from those before they spend your time and be off to service to them and answer their questions personally, right?

BRANDON: Right. If you’re going to outsource all your data gathering or researching, you can still do that by leveraging your customers or the people who may visit your website. They’re going to want to ask questions and some customers is going to answer their own questions or help each other and so you know if you have a forum on your website, you can even gather data without even being part of it. You know the customers can kind of help each other.

MATT: Yeah definitely. I guess another place you could take this, instead of maybe over processing but over infrastructure, right? So one of the things that we’ve been able to do as internet business is to eliminate things like office space and all the kind of things that go with that, right, so employees and the legal processes that are part of employees.

BRANDON: Yeah, you can eliminate the use of an office. You are eliminating the equipment that comes with it, computers, desks, cubicles, the lighting, the utilities. All these are expenses that you don’t necessarily need if you eliminate the need for it so like we talk about a lot is you outsource your work to people who work from home. They’re using their computers at their office, at their home, their utilities and it’s so worth if you do pay extra which you don’t. But if you did pay any extra, it will be well worth it.

MATT: And they don’t have to commute like an hour each way like in L.A. you would have to, right?

BRANDON: Exactly.

MATT: So you’re eliminating that uneeded process of actually driving to work which I think is pretty sweet.

BRANDON: Yeah. It’s a win-win. I mean they’re gaining their time back by not having to commute back and forth and your gaining the fact that you don’t have to have office for them. So, yeah, I’d say that’s a big one to look for eliminating, it’s a big cost saver.

MATT: So in terms of employees versus contractors, what are the processes or legal requirements for eliminating is moving towards contractors?

BRANDON: Well, technically and legally the definition of an independent contractor or independent consultant is that you’re not able to tell them when to work, where to work, or how to work whereas an employee you can. And in trade for that you don’t have to pay half of their payroll tax which is about 7 ½ percent that includes the social security tax and others that go along with that. And since you don’t have the right to tell them when and where to work, they end up doing it there in the night or over the weekend so it’s not necessarily a bad thing to not be able to tell them that they need to be in by 8 and leave by 5. They’re more than happy sometimes to work over the weekend when they have the time.

MATT: Yeah, definitely nocturnal so given the choice I always work at night and you know working traditional 9 to 5 jobs you know working the morning was never very productive for me but for some reasons they will never believe me and let me work at night in a real corporate world.

BRANDON: Yeah and you’re you know you’re eliminating a lot of the office politics, you know the people going out for smoke breaks, or you know gabbing up the water cooler or you know the HR issues that you have to always be concerned with if you had an office environment like sexual harassment or all those other issues that come up. I’m not saying that independent consultants don’t have certain headaches that come with it but they definitely seemed to be a lot less than if you have a group of people working together that you have to worry about.

MATT: I think in relation to contractors is one of the things that really ties into the over processing which is the ability to scale up and scale down as you need. So with employees they’re really full time employees and you can’t just say, hey don’t come in for two weeks, because that’s not how employees work. But with contractors you are able to ramp up people for projects and say, hey I need you for a month, this month but after that I’m not going to need you.

BRANDON: That’s a big deal, yeah.

MATT: So definitely reduces the waste of over processing.

BRANDON: Yeah, and so I would say that’s worth a big chunk of change just because you can cut them off when you don’t need them and you’re going to end up saving a lot of our time. I would say going back a little bit to the time spent to employees versus independent contractors, I could easily say that when managing employees, you end up spending up at least 50 percent of your time as a manager dealing with HR issues or just what they call the people factor, the personal issues dealing with employees whereas you don’t really have that when you’re dealing with independent contractors. And so your time is kind of freed up quite a bit when you don’t have all that.

MATT: I think that’s definitely true. So that basically sums up the Lean philosophies and how they might apply to a small business. Outside of Lean, is there anything that we missed that might not fit into this model?

BRANDON: Well, I guess if we’re going to wrap up elimination, there’s a lot of other area that we can eliminate things like paper. Everybody is striving for the paperless office but I think it’s really gotten here now worth electronic online banking. You should really try to avoid using paper checks at all costs. You should really try to avoid paper invoices if you’re the type of business that has to invoice. Freshbooks is a great program out there that allows you to send your invoices electronically where the customer then can just click on button and then pay with the credit card and any other electronic means. Paper faxes are out. Anybody that talks about needing a fax, I mean, I kind of roll my eyes at but I do have a fax number just in case it’s the only way to do it but of course an electronic fax.

MATT: Just say no to faxing. Just say no.

BRANDON: Just say no to fax, yeah. I don’t use efax. I find them overpriced. I have a site that I use called Maxemail.com which is great. It’s two bucks a month. I guess it’s 24 bucks for a year. But pretty much I think I get about a hundred inbound faxes with that two bucks and it’s all I need. I barely get over 10.

MATT: Yeah, and I use my fax from Ring Central which is our virtual PBX that we use.

BRANDON: That’s a good one too. In fact, I probably recommend that over the Maxemail just because it’s all in one and built in. You’re going to want to have a phone number anyways so you might as well get that one for free.

MATT: Yeah, you don’t, you remember two.
BRANDON: Exactly. That’s the case is that it actually uses the same number. That’s good. Try to eliminate paper contracts. Many contracts require signature. I’ve kind of gotten around that by having the little saved signature on my desktop of my computer which is a .png file so it looks like it’s see through. So just the signature gets put on so I actually take an emailed contract, put my signature on it by copying and pasting it right onto the signature line and sending it back to him under 30 seconds. That’s a great time saver. I like that old trick.

MATT: Yeah that’s a really good trick. I used to use my tablet PC when I have one of those to design with the patent.

BRANDON: Yeah.

MATT: And since I don’t have that anymore, I’ve used your trick a little bit and I’ve also used to signing with my finger on a touch pad which actually works surprisingly.

BRANDON: That only works with a Mac, right? Or do the PCs have that?

MATT: I did it with a Mac but I don’t know if it work with the PC or not. Basically I held down the button like it was touched and I signed with my other finger or whatever. I think that’s back of the pen actually. So hey,…

BRANDON: Nice.

MATT: … you can be creative.

BRANDON: Well, I know you can buy little tablet to write on with I think Bamboo makes one and they’re getting pretty cheap now. So they used to be used only for artist who want to use pen tablet input for sketching but now they’re using it kind of as a generic business tool.

MATT: Yeah. Another thing that I’ll eliminate is just desktop software and move everything up to the web, really getting towards the all web-based software will allow your team to be able to access everything. So I’ve tried to move everything off there and just eliminate anything that requires me to send a file back and forth.

BRANDON: Yeah, it took me awhile to finally convert everything over to Gmail but I’m glad I did. I think it’s a great web-based email tool. I think anything you can do with in terms of file sharing. What do you use, Matt, for your file sharing?

MATT: I keep a lot of stuff in Google docs. I think that’s probably the primary place that I keep everything. And when I email stuff, I try to email a link to Google docs as oppose to attaching a file. This kind of ties into the transportation stuff we’re talking about Lean that every hand off you have is a potential for waste and so when you have you know a bunch of different files that you sent out and everyone has their own copy and they all make an edit and they send it back to you. Well, assimilating all those changes is going to be a real pain and waste a lot of your time. But if you have it centrally stored somewhere then you know everyone can edit it and see the other people’s changes which I think is really important.

BRANDON: Yeah. I think along the same lines of eliminating, I’d say at least when you’re starting off it will take credit cards only. I mean there’s no easier way of dumping money into your checking account than having a credit card take it and on a daily basis depositing the money into your checking account without you having to go to the bank depositing checks or all that is eliminated.

MATT: Don’t tell me you’re going to turn down cold hard cash?

BRANDON: I am. I will turn it down. That’s not worth it to me. If I get a check, I’ll slap my forehead and go, oh my god, I have to go to the bank for this. Although I just saw recently there’s great ways to electronically deposit. I know, Matt, you have USAA as a bank as your military family but a lot of people don’t have that. But USAA does have the ability to scan your checks and deposit them without ever going to the bank, is that right how it works, Matt?

MATT: That’s right. And now they just released a new iPhone app that I can just take a picture with the iPhone and deposit it from my iPhone.

BRANDON: Nice. I noticed Chase is now offering an electronic depositing but they actually give you a little machine that you plug into your USB port. You know those little machines that when you into the bank, they run them around and it goes in like a little U shape slot.

MATT: Yeah, yeah.

BRANDON: You put the check in one end and it kind of goes around the U shape slot and kind of ends back coming back to you.

MATT: Yup.

BRANDON: They actually give those as a consumer based. They give those to the customers who sign up for this. I do think it has a monthly subscription. I think it’s 25 bucks a month or something. But I mean for somebody who gets a lot of paper checks, if you happen to have to take paper checks, that’s not a bad option. You know you can just plug it in your computer and just run these checks through, hundreds at a time.

MATT: Yeah. But if you accept a lot of checks through the mail you know there are mailing services that will open those for you and deposit them for you. So you can even outsource that.

BRANDON: That’s true. And then you bring up a good case with your mail. You use earth class mail. Tell us how that works.

MATT: Yeah so I eliminated having a physical mailing presence. So basically they give me a virtual address somewhere, some major street in Beverly Hills or in Las Vegas or whatever I want it and I get like a suite number so you know suite 30010 or 32000 whatever and basically all my mail goes that and looks like my business has a prestigious address and they actually scan all my mail that comes in so I get a .pdf of whatever I got sent to me and the whole packages for me. It’s really great.

BRANDON: So you can be anywhere in the world and still get your mail electronically if you choose.

MATT: Yeah. isn’t that pretty awesome.

BRANDON: That is cool. That is real cool. I mean especially for those who you know are travelers, jet setters, that’s the last thing that probably needed to get electronic and they finally figured out how to do it. That’s great.

MATT: I actually just found some cool programs on the web this week as I was playing around. It will allow you to just type in a little text box and send a snail mail straight from the webpage. So both ways, sending in and receiving, you can do it on the web. You don’t have to go to the post office anymore.

BRANDON: Nice.

MATT: Unless you need that’s stamp for your taxes, you know.

BRANDON: Exactly. Well, there’s a lot of tools out there that kind of eliminate a lot of the processes that I think we’ve all come accustomed to from traditional businesses but it’s just changing so rapidly. You have to keep up with all those stuff and that’s we’re here to do to help you learn about these tools, techniques, trying to stay ahead of the competition, get that cutting edge advantage. So…

MATT: Definitely.

BRANDON: If you want to check out more and find out more tools that we use, go to the website automatemysmallbusiness.com.

MATT: And we actually had a comment on the website this week from John who is commenting about our project management podcast. So he said, “I’m glad to hear you’re covering both Basecamp and Microsoft Project on one segment. There are a lot of differences between the two and oftentimes small businesses find themselves marginalized between the two.” He recommends Intervals which is at myintervals.com. I kind of quickly look over it, it looks pretty good. So I might actually try that out. If anyone else is using that, we’d like to hear your feedback and see what you think of it, if you think it’s good for your small business and should we use it.

BRANDON: Yeah so we’re going to put a list of all these tools that we recommend and in addition quite a few others that we don’t have time to talk about on the podcast but we will include them all in a tool box that we have going out to those who want to subscribe to our newsletter. So if you want that, shoot as an email or sign up for our newsletter and we will send that to you.

MATT: Yeah, you should be able to sign up right on the front page of the website so just do that and then you’ll get an email once you sign up with the list of tools that we use.

BRANDON: And then you can always catch us on Twitter, put a #amsb and we’ll catch it there and we can answer any questions there too or send us an email at podcast@automatemysmallbusiness.com.

MATT: Podcast, singular.

BRANDON: That’s what I said, yeah.

MATT: Okay, until next time. I’m Matt.

BRANDON: And this is Brandon.

MATT: Thanks for listening.

You’ve been listening to Automate My Small Business. We hope you enjoyed this episode. To get a list of the links we’ve just talked about or download more episodes and How To videos, go to automatemysmallbusiness.com. Thanks for being with us and catch us next time on Automate My Small Business Podcast.

Podcast music features, “Nothing’s Got Me” by Big Bad Sun, distributed by Magnatune and licensed under Creative Commons. The Automate My Small Business podcast is engineered by Vincent Furlong and transcribed by Flo Umali. And licensed under Creative Commons Attribution No Derivative Works license and may be freely distributed to share with friends, co-workers and strangers.

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