Episode 9 - Money Down the Drain - How Resource Waste is Killing Your Profits

You’re probably wasting 20–30% of your resources without even realizing it.
That’s money down the drain, literally.

In this episode, I share Rachel’s story, who discovered that her rising utility bills weren’t just bad luck… they were bleeding her profits dry. The good news? Simple changes helped her cut costs, reduce waste, and start saving money she could finally put to better use, like giving a raise, paying her daughter’s college tuition, or taking that much-deserved vacation.

If you’ve ever thought sustainability is too expensive, this episode will flip that idea on its head. Waste reduction is profit protection.

👥 Who This Is For

• Food and CPG manufacturers looking to lower operating costs
• Small business owners who’ve noticed rising utility bills or material costs
• Teams dealing with production inefficiencies or ingredient waste
• Anyone who wants to improve environmental performance and profitability
• Owners who think they “don’t have time” for sustainability, but hate wasting money

💸 What You’ll Learn

• The 4 biggest categories of business resource waste
• How to calculate what waste is really costing you
• A 4R framework: Review, Reduce, Reuse, Recycle/Recover
• Quick wins that require $0 investment
• A 30-60-90 day plan to cut costs and improve efficiency

📉 This Week’s Quick Action List

• Do a “lights out” audit after hours to spot energy waste
• Track one resource (like electricity or ingredients) for one week
• Interview your team: “What waste drives you nuts?”
• Walk the facility and check for leaks or unnecessary equipment use
• Deep dive into one utility or supply invoice and ask, “Why is this so high?”

🧠 Resource Efficiency = Business Resilience

Reducing resource waste helps you:

• Protect your margins
• Reduce vulnerability to utility price hikes and supply issues
• Improve employee morale (yes, waste affects culture too)
• Impress eco-conscious customers
• Free up funds for raises, growth, or even a well-earned vacation

🛠️ Free Resource
📥 Want the Resource Efficiency Quick Wins Checklist?
Email me for 25+ no/low-cost ideas sorted by energy, water, material, and time waste.

📆 Your 30-60-90 Day Waste Reduction Plan
30 Days: Track key resources, establish a baseline, calculate waste costs
Next 30 Days: Implement quick wins, train your team, track improvements
Last 30 Days: Invest in high-ROI upgrades, systematize tracking, scale what works

💌 Questions? Feedback?
Reach out at anca@3pimpactconsulting.com - I’d love to hear from you.

🎧 Listen now - and take the first step toward a more resilient business.

I am the founder of 3P Impact Consulting and I help small businesses build long-term resilience through sustainable practices. I adapt tools used by big corporations to fit the reality of purpose-driven small business owners - so they can grow with confidence, even in uncertain times. 

💻 Learn more about my work at www.3pimpactconsulting.com/services-overview
📬 Subscribe to my blog and newsletter at www.3pimpactconsulting.com/blog

Transcript

Episode 9 - Money Down the Drain - How Resource Waste is Killing Your Profits

[Opening - Story]

Rachel runs a small manufacturing company specializing in fresh corn and flour tortillas for local restaurants and regional grocery stores. For years, Rachel focused on improving her recipes and building her customer base. Business was good - she had loyal customers, her products were excellent, and she was making a decent living.

But one month, when her accountant was reviewing the books, he asked her: "Rachel, why did our utility bills jump 15% this year when our production only increased 5%?"

Rachel didn't have an answer. So she decided to dig in. 

Her old equipment was wasting energy every morning - fired up two hours before production actually started. She was throwing away nearly $800 worth of ingredients every month. Her water heater ran at full temperature 24/7 even though she only needed hot water during production hours. Her HVAC system was heating and cooling the entire building even when nobody was there.

When Rachel added it up, she was shocked. Over $15,000 a year. That was the vacation she'd been putting off for three years. That was the raise she wanted to give her best employee. That was her daughter's college fund contribution.
She started addressing these issues one by one  and within 6 months, Rachel had cut her utility costs by 35% and reduced ingredient waste by half. The changes weren't complicated or expensive. Most were simple adjustments that just required paying attention.

That's what we're talking about today - how resource waste is silently killing your profits, and more importantly, what you can do about it. Don't go anywhere, I'll be right back.

[Intro]

[Introduction]

Today, we're looking at another critical piece of business resilience: how you use your resources.

And just to be clear - this isn't just an environmental episode. Yes, reducing waste is good for the planet, but what we're really talking about today is money. Your money. Money that's flowing out of your business unnecessarily every single month.

In the next 20 minutes or so, we'll cover:
● The four major categories of resource waste that hit small businesses hardest
● A simple framework for identifying and reducing waste
● How to calculate what waste is actually costing you
● And most importantly, practical actions you can take to waste less.

[Why Resource Waste Matters]

Reality check: small businesses waste somewhere between 20 to 30% of their resources on average.

Think about that. If you're spending $50,000 a year on utilities, materials, and supplies, you're potentially wasting $10,000 to $15,000. That's not a small amount.
But what makes it worse is that most small business owners have no idea this is happening. You pay your electric bill every month without questioning it. You order supplies the way you've always ordered them. Your equipment runs the way it's always run. The waste is invisible until someone - like Rachel's accountant - asks you to actually look at the numbers.

[The 4 Major Resource Waste Categories]

Let's break down where small businesses waste resources. 

Category 1: Energy Waste

Let's start with energy, because this is often the biggest opportunity and the easiest to address.

The common culprits are 
● Things like HVAC systems running when your facility is empty.
● Then there's lighting - businesses still using old incandescent or even fluorescent bulbs when LEDs would cut their lighting costs by 75%; or lights left on overnight.
● Equipment left on unnecessarily - computers, printers, machinery that runs 24/7 even though you only need it for a few hours.
● And lastly, poor insulation or air leaks that make your HVAC work twice as hard (walk-in coolers with bad door seals).

Here are some quick wins:
● LED conversion is probably the easiest. Yes, there's an upfront cost, but the payback is usually under two years, sometimes less than one year.
● Programmable thermostats let you automatically adjust temperature when you're closed - this alone can cut heating and cooling costs by 20-30%.
● Motion sensor lighting for areas that aren't constantly used, like storage rooms or bathrooms.

Category 2: Material Waste

Now let's talk about material waste, because this one hits manufacturers and food businesses especially hard.

Common issues include 
● Over-ordering because you want to "be safe" or get volume discounts, but then materials expire or become obsolete. 
● Or it could be poor inventory management - you know you have something somewhere, but you can't find it, so you order more. 
● Then there’s packaging waste, especially single-use packaging that you pay for twice - once to buy it and once to dispose of it. 
● There’s also scrap from production inefficiencies - imperfect cuts, mistakes, rejected products. 
● And finally expired or damaged goods that you end up throwing away.

Quick wins here: 
● First, when it makes sense, apply just-in-time ordering principles.
● Try to order more frequently in smaller quantities. Yes, you might pay slightly more per unit, but you'll save massively on waste and storage costs.
● Another one is better inventory tracking - even a simple spreadsheet where you log what comes in and goes out can reveal patterns. You may discover that you have three months of inventory of one item while constantly running out of another
● Also, look at reusable or recyclable packaging options. Sometimes switching suppliers or packaging types can cut costs and waste simultaneously.
● And lastly, look at processes for improvements to reduce scrap - this might mean better training, clearer procedures, or just taking the time to figure out why you're making so many mistakes.

Category 3: Water Waste

Water waste is one of those things that's invisible until you start looking for it. Then you see it everywhere.

Common situations are: 
● Leaks. I'm not talking about obvious gushing pipes - I'm talking about that toilet that runs a little, that faucet with a slow drip, that hose connection that's not quite tight. These seem insignificant, but a toilet that runs constantly can waste 200 gallons per day. That adds up.
● Inefficient cleaning processes - using more water than you actually need for cleaning, sanitizing, or rinsing.
● Older equipment that uses way more water than modern equivalents - commercial dishwashers are a big one here. 
● And lack of water recycling or reuse - opportunities to capture and reuse water that just flows down the drain.

Quick wins here: 
● Do monthly leak checks. Put it on your calendar. Walk around and look for running toilets, dripping faucets, wet spots around pipes. Fix what you find.
● Install low-flow fixtures - aerators on faucets, low-flow pre-rinse spray valves if you're in food service, efficient toilet fixtures. These are inexpensive and easy to install.
● Review your process for optimization - do you really need to run that rinse cycle twice? Can you fill a sink instead of running water continuously? Small changes in procedure can make big differences.
● And capturing and reusing water where possible. This gets more complex depending on your business, but maybe you can capture cooling water from equipment or systems and use it for cleaning or watering plants.

Category 4: Time and Process Waste

Now this is the category that surprises people, because we don't usually think of time as a resource waste issue. But inefficient processes waste labor time, which costs you money, and they often waste materials and energy too.

Common issues: 
● First, redundant processes - you're doing the same thing twice because that's how you've always
done it, or because two teams don't talk to each other. 
● Or, poor workflow design - your team is walking back and forth across the facility because the layout doesn't make sense. 
● There is also unnecessary transportation or movement of materials.
● A lot of times is also the waiting time between steps - one part of the process finishes but the next step isn't ready, so products or materials just sit there. 
● And of course, rework due to quality issues - when you have to do something over because it wasn't done right the first time, you're wasting time, materials, and energy.

Quick wins for this category: 
● Process mapping - this sounds fancy, but it's just drawing out your current process step by step. You'll immediately see redundancies and bottlenecks. You can do this using nothing more than sticky notes on a wall.
● try cross-training to reduce waiting - if people can do multiple jobs, you don't have work piling up waiting for one specific person.
● Look into quality improvements to reduce rework - often this means better training, clearer standards, or simple mistake-proofing. The Japanese have a concept called "poka-yoke" - basically, make it impossible to do the wrong thing.
● And of course, layout optimization - sometimes just rearranging your workspace can eliminate hundreds of unnecessary steps per day.

[The Resource Efficiency Framework - The 4 R's]

Okay, so you're starting to see where waste happens. But how do you actually address it systematically? Let me give you a simple framework called the 4 R's of Resource Efficiency.

R1: Review - Baseline Your Current State

The first R is Review. You need to understand your current state before you can improve it. This is about establishing a baseline.

Start by tracking consumption for at least 30 days. Pick your biggest resource categories - usually that's energy, water, and your top 3-5 materials or supplies. A simple spreadsheet works fine. Track how much you use and how much it costs. 

Then calculate cost per unit of production. If you're a bakery, that might be cost per loaf or per dozen pastries. If you're a manufacturer, cost per unit produced. This tells you your efficiency level.

Finally, identify your biggest waste sources. After 30 days of tracking, it'll be obvious. Maybe it's that your energy cost spikes on Mondays. Maybe you're throwing away 20% of a specific ingredient. Maybe your water usage doubles in the afternoon.

R2: Reduce - Cut Unnecessary Consumption

The second R is Reduce - cutting unnecessary consumption before you do anything else.

Apply the "do we really need this?" test. Challenge your assumptions. Do you really need the whole building heated at 72 degrees, or would 70 or even 68 work fine? Do you really need to order a 3-month supply, or could you order monthly? Do you really need to run that equipment overnight?

Right-size your orders and processes. Don't order the giant size just because the per-unit cost is lower if you end up throwing half of it away.

Eliminate redundancy. If you're doing something twice, can you do it once?
Optimize schedules and usage patterns. Use equipment during off-peak hours if your utility has time-of-use pricing. Batch similar tasks together. 

Start with the low-hanging fruit - things you can change without spending money.

R3: Reuse - Extend Resource Life

The third R is Reuse - extending the life of resources before you throw them away or recycle them.

Before you throw something away or recycle it, ask if it can be used again.

Repurpose materials and packaging. Can those cardboard boxes be used again? Can that packaging material protect something else? Can scrap material from one process be input for another? 

Implement reusable systems. Switch from disposable to reusable whenever it makes sense.

Capture and reuse resources - this might be heat, water, or materials. That hot air coming off your equipment? Maybe it can heat something else. That water you used for rinsing? Maybe it can be used for an initial wash before you throw it out.

When it makes sense, buy and sell used equipment. Don't assume you need brand new. Used equipment often works great and costs a fraction of the price. And when you upgrade, sell your old equipment instead of junking it.

R4: Recycle/Recover - Close the Loop

The fourth R is Recycle or Recover - closing the loop on things you can't reduce or reuse.

Set up proper recycling programs. Make recycling easier than throwing away, and people will do it.

Compost organic waste if you're in food service or food production. Many cities now have commercial composting. Some businesses even compost on-site. Either way, you're converting disposal costs into useful soil.

Sell scrap materials. Depending on your business, your scrap might be valuable to someone else. Metal, cardboard, certain plastics, wood, used coffee grounds - there are often buyers for them. Even if it's not much money, it's better than paying to throw it away.

[Financial Impact]

Now let's talk money, because that's what this really comes down to. How do you calculate what waste is actually costing you, and how do you know if improvements are worth the investment?

[How to Calculate Waste Costs]

First, calculating waste costs. It's more than just the purchase price of what you throw away.

There's the direct cost - what you paid for the resource you're wasting. If you throw away $100 worth of ingredients, that's $100 in direct cost.

But there's also the disposal cost. You often pay to throw things away - dumpster fees, hazardous waste disposal, water and sewer charges. Add that up.

Then there are labor costs associated with the waste. The time spent dealing with waste - ordering things you don't need, moving them around, disposing of them. This is harder to calculate, but it's a real cost.

And finally, the opportunity costs - the space used to store excess inventory could be used for something productive. The capital tied up in materials you'll never use could be earning interest or invested in growth.

Here's a simple formula to get started:
Waste Cost = (Resource Cost per occurrence + Disposal Cost per occurrence) × How Often It Happens Annually
So if you throw away $50 worth of ingredients each week, plus pay $10 in disposal, that's $60 per occurrence × 52 occurrences per year = $3,120. If you add in the labor time - maybe 30 minutes per week at $20/hour is another $520 per year. Now you're at $3,640 per year for that one waste stream.
Calculate this across all your waste categories and you start to see the real impact.

[Your 30-60-90 Day Action Plan]

As usual, I’ll give you a 30-60-90 days plan to tackle waste:

[First 30 Days: Assess]

In your first 30 days, focus on assessment.

Choose 2 to 3 resource categories to track. I'd suggest starting with energy and water because they're easy to measure from your bills, plus your biggest material cost. Track these for the full 30 days.

Gather baseline data. What are you currently using? What's it costing? Don't try to change anything yet - just measure.

Calculate your current waste costs using that formula we discussed.

Then identify your top 3 opportunities. After 30 days of tracking, you'll see patterns. List the issues and rank them based on cost and ease of fixing.

[Next 30 Days: Implement Quick Wins]

In the following 30 days, start with no-cost or low-cost changes. These are things like adjusting thermostats, fixing leaks, changing procedures, optimizing schedules. You want early wins that build momentum and generate savings you can invest in bigger improvements.

Get team buy-in and training. Explain why you're making changes. Show them the waste you found. Get their input - they often have great ideas. Then train them on new procedures if needed.

Begin tracking improvements. Keep measuring the same things you measured in the first 30 days. Now you can see the impact of your changes.

Document what works. Keep notes on changes that produce results. This helps you replicate success in other areas and builds your case for bigger investments.

[Last 30 Days: Scale and Systematize]

In the last 30 days of the 90 day timeframe, look at the rest of the issues on the list (i’m talking about the list you created by the end of the first 30 days).

Consider capital investments with good ROI.

I don’t think I gave you yet the formula to calculate the payback period. It’s Investment Cost ÷ Annual Savings = Years to Payback. If something costs $1,000 and saves $500 per year, that's a 2-year payback.

By now, you've probably generated some savings from your quick wins. Maybe it's time for that equipment upgrade, that insulation project, or that LED conversion. Use the data you gathered to make the case.

Create ongoing monitoring systems. Don't let this be a one-time project. Build resource tracking into your regular business processes. Maybe you review utility bills monthly, do quarterly waste audits, or check efficiency metrics in your weekly team meetings.

Plan for continuous improvement. There's always another level of efficiency to reach. Set new goals based on what you've learned. Maybe you focused on energy first - now you can tackle materials waste more deeply. Maybe you improved your main production process - now you can optimize your support processes.
The goal by day 90 is to have resource efficiency embedded in how you operate, not just a special project you did once.

[This Week's Action Items]

If you want a quick list of actions you can start do this week, here it is:

Number one: Conduct a "lights out" audit. After your last employee leaves, walk through your facility. What's still running? Lights, computers, equipment, HVAC? Make a list. For each item, ask: does this need to be on? If not, figure out how to turn it off or put it on a timer.

Number two: Track one resource for one week. Pick your biggest resource cost. For one week, track it carefully. How much are you using each day? When are the peaks? Where's it going?

Number three: Interview your team. Ask your employees: "What waste do you see that bugs you?" They know where problems are. The person who uses the equipment every day knows it's inefficient. The person who stocks the shelves knows you're ordering too much of something. The person who cleans knows where the leaks are. Ask and listen.

Number four: Check for leaks. Spend 15 minutes walking around looking for water leaks, air leaks, and energy leaks. Dripping faucets, running toilets, gaps around doors, windows that don't close properly, equipment that's always warm even when "off." Make a list and start fixing them.

Number five: Review one invoice. Pick your biggest utility bill or material invoice. Really look at it. Compare it to the same month last year. Is it higher? Why? Compare it to other months. When does it spike? Why? Just asking these questions will reveal opportunities.

[Recap]

Alright, let's recap what we covered today because this was a lot of information.
We started with why resource waste matters for small businesses. The typical business wastes 20-30% of resources, which directly impacts your bottom line. But it also creates vulnerability, affects your reputation, and represents missed opportunities.

We covered the four major waste categories: energy waste, material waste, water waste and process waste.

I gave you the 4 R Framework: Review to establish your baseline. Reduce to cut unnecessary consumption. Reuse to extend resource life. And Recycle or Recover to close the loop.

We talked about how to calculate waste costs, your 30-60-90 day action plan, and practical steps you can take this week.

The bottom line is this: Resource efficiency isn't just good for the environment. It's good business. It saves money, reduces risk, attracts customers and talent, and builds long-term resilience.

I've put together a Resource Efficiency Quick Wins Checklist with 25 ways to stop wasting resources - all low-cost or no-cost changes. I've organized them by energy, water, materials, and time waste, so you can jump straight to your biggest problem area.

I'll put the link in the show notes. But if I don't get to it by the time you listen to this episode - because let's be honest, sometimes life gets in the way - just reach out to me directly. My email is in the show notes, and I'm happy to send it to you.

[Next Episode Preview]

When you start tracking your consumption and making improvements, something interesting happens. You start asking bigger questions like: "How do we know if we're actually making progress overall?" and "What should we be measuring to understand our true impact?

That brings us perfectly to Episode 10: "Track Your Business Impact - What Matters Most for Small Business Resilience."

We'll talk about how to measure what matters, track progress across all the areas we've discussed - from business continuity to risk management to resource efficiency - and use simple metrics to build a stronger, more resilient business.
You can implement all the right practices, but if you're not measuring and communicating your impact, you're missing opportunities. Opportunities to motivate your team, attract customers, secure better financing, and yes, feel good about the business you're building.

[Closing]

But for now, focus on this: Every dollar you waste on resources is a dollar that could go toward growth, better wages, improving your products, or yes, even your own quality of life and maybe that vacation you've been putting off for years.
Resource efficiency isn't just good for the planet. It's good for your business resilience, your bottom line, your team morale, and your reputation in the community.

Before listening to this show you were probably thinking that being sustainable means spending more money. But the most sustainable thing you could do is stop wasting what you already have.

That's the truth. Sustainability and profitability aren't opposites. They're partners. When you stop wasting resources, you save money and help the environment at the same time.

Thanks for listening. Until next time, remember - small steps lead to big impact, and resilience isn't just about surviving, it's about thriving.
See you next time.

[Outro]