Your bin is a financial report: Finding profit in your trash

Tonight, Samantha Smits wants you to do something strange: take a walk to your bins. Most people see garbage; a strategic leader sees a real-time financial report. If you aren't measuring your waste, you are steering your business blind.

In this episode:

• The double invoice issue: Why you are likely paying for your resources twice or more.
• Why efficiency is the original sustainability.
• How to use your waste as business intelligence to decrease your monthly bills.

Connect with Samantha Smits on LinkedIn or her website.

Work with me: Are you a tourism leader looking to professionalise your operations and meet international certification standards? Let’s talk about how to protect your profit and give you your time back.

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The Sustainability Edge is hosted by Samantha Smits, your guide to turning sustainability into a competitive edge.

Transcript

SPEAKER_00 0:00

This is kind of data that steers your business. I think that is almost like that is quite a decrease, and the same decrease is going to happen to your monthly bill as well. So I guess you can play with it. Hi, I'm Samantha Smith, and welcome back to the Sustainability Edge, the tourism podcast. No Yargon, no fluff. We're breaking down sustainability and especially how to turn sustainability in a practical tool that gives you more profit, more time, stuff that's staying, and a business you can be proud of. Let's get started. Hello, hello, and it's great to have you here again. Today I'm really going to challenge your thinking, and I'm already laughing about it a little. It's going to be another link between sustainability and profit, and trust me, hear me out on this one. And I might gonna ask you to do something strange later. I'm actually going to ask you later to check the waste in your bin and to see what's in there or the multiple bins you have. And you might think, where is this going? But listen, there's profit hiding in your trash. And I don't just mean by selling it all, there's more into it. So let's circle back to in general what is waste. Because when I talk about your trash, we all think about smelly, stinky, expired things in your bins that have to be disregarded and you never want to think about again. But waste in general, it already ties back again to efficiency because it comes from the verb to be wasted, so something that was meant to be used, but in the end you did not use it and it had to go, which often is a shame, and the whole repurpose of recycling something, and it doesn't only have to regard to what's in your trash bin, but it's a good link to think about resources. And when I talk about resources, I mean some I mean food, but I also mean next to what's in your trash bin from paper, organic batteries. Well, you even have human resources, you have you have the energy bill, you have the water bill, you have the fuel bill from the vehicles, there's a lot of variable pronunciation, variable things, fluctuating bills in your business that depend on how much you use it. With all of these examples, the more you use, the more you pay. But actually, even if you don't use it, but still receive it, and here's the difference if you receive a lot of water, if you receive a lot of food, if you receive a lot of anything you can waste, what I just talked about, electricity, but you don't use it all, you still usually pay the same bill. And this gap is where you waste things. So next to that, wasting such a thing is obviously also a shame in terms of sustainability for how it's created and provided and for nature, it is also quite a shame for you because when you actually use everything you receive, it is less of a waste also in terms of the bill you pay. So this is one of the biggest points I always share with people. If you review, like I just say, your treasure bin or in general your operational costs that you have every month, and not just by how much money you spend on, for example, your water bill, but actually how much liters you use, because even the pricing, it changed every month. You could have the same bill for two months, but still one month have used more than another because the pricing changed. It's so powerful to measure this because you cannot change what you don't measure. So it's so tempting here to ignore your spreadsheets or your bills on this or to not measure this. But it's so impossible when you see that the bills are rising, when you're looking where to cut costs. And again, if if you don't have a system for this, you have to pay for everything multiple times, even if you don't use it because you've received it. You pay for the food, but you also pay to throw it away and have to collect it, you pay for guest data, but then you also pay time to print it, but you also pay to shred it, and it's kind of like a double invoice issue. So you really have to see how can you cut all of this down. So with all of these resources, again, we're talking about water, electricity, fuel, food, everything in your bin, from paper to organics to other liquids, or maybe you have batteries and other hazardous substances, even cooking oil that you've used, all of these. I think even now that I mention cooking oil, that's also an excellent example that you even see in the home. Because when you use too much, you will have a lot left. You'll have greasy food, and there will still be oil in the pan that sometimes depending on the food you can't even reuse and you have to dispose of, which is a shame. When you use exactly enough of all, not a lot will be left. So there's always the cost of purchasing something, so you have to pay those bills. The point is, it doesn't actually matter how much you actually end up using, you pay for how much you have requested, how much you have ordered, how much you have received. That cost will always be there. And then if we actually talk about what's in your trash can or the tangible things, you also have to pay for disposal because you pay to have your trash collected, and some systems you pay to have it separated, and it those costs can be significantly lower if there's less to dispose of. And we also have the opportunity cost. And opportunity cost that's actually something that I learned about from the business consultants I've been working with and growing my own business and growing as an entrepreneur. But the opportunity cost is the cost of not doing something. Because usually, as a business owner, you have to make true choices. You choose whether to get this help, or whether to do it by yourself, or whether to start taking sustainability seriously or not. Usually the choice between this or that. And you always also have to take into account the choice if you don't do something, you can choose this opportunity, but if you choose to not pursue it, it also has a cost. You actually might think, Yeah, I am saving costs because I'm not paying for help, or I'm not paying to have a disposed, or I'm not paying for an extra staff member. But what does it cost you to not make that decision? If you continue to be efficient, where for example an extra staff member could help, or by investing in a system, or investing in a consultant, or investing in help, there might be an upfront cost, but down the road, it might save you so much more because it's more expensive for you to keep it going by yourself. So that those are three things that actually looking at the resources you have already will tell you. And there's so many layers. If you think about food, for example, you could even pay for food three times because you order it, and if you even pick it yourself, you pay for the fuel for picking it up, but otherwise you also pay for it to have it delivered. Then you are paying for it to cook it, which means there is energy, there's oil involved, and even a fourth time, you can also pay for it when you then have to dispose it. But that one can already be fully cut by managing your food portions, and that could be a whole other episode of how to deal with food waste, and but it just shows that taking waste in the biggest sense as in waste in your bins, but also the waste you create by inefficient working, how much it will give back to you, and when seeing this fiscal waste or the waste in the company you see by efficient working, you have to find a way to stop paying multiple times too much for the same resource. And let's dive into that. One very practical way that I like, which you can actually do on site, if we talk about food, for example, if you happen to have a kitchen, this could also be a stuff kitchen for toolbrater or the actual kitchen for guests and accommodations. If you just start weighing the food waste you produce in one day and note that down, but also identify what are actually the ingredients that are most wasted, and then find out how much it costs for you to buy this, you already realize why it is so important to measure something, because this will exactly tell you okay, we can order less of this ingredients, or we should freeze them more, or we have to control the portions better. The point is you cannot improve what you don't measure, and this is kind of data that steers your business, and a way to also do this digitally or to visualize how much you can solve is something that I talk about in a masterclass I have. I can also show the masterclass later in the show notes about a hidden profit number. And what is a hidden profit number? You pick a resource and you write down how much it costs you per month, and then how much you've actually used, so that you actually know if we talk about water again, how much you pay per liter that you actually have received from all the water you use in your businesses. As soon as you start measuring and you realize, oh, but I think we could reduce the amount of liters easily. We could this is just a vague example, of course. It's wildly different per context. But imagine if you only use 200 litre, probably much more per month, but you believe, oh, I can easily cut this by to 150. If you spread it out on the table, you can already see how your operational cost is going to change. Because if you I think that is almost like that is quite a decrease, and that same decrease is going to happen to your monthly bill as well. So this you can play with. Not only is it a big win for your destination, not only for how it's produced, but also for your operation. So there's only wins all around. There's honestly no downside to taking this thing seriously. So kind of this waste is the opposite view of being efficient and being a successful business. By taking this seriously, it will help your profit margin, but also a financial buffer you can build to reinvest in, for example, more sustainability or in higher quality products that might have less literal leaks or your guest experience. That's the point of business of by making every process smoother and smoother, including the waste. So, what I want you to take away from here, rather than thinking that just carelessly using things and putting them in the bin is gonna save you time by not looking at it and just continue running your business as usual, you'll actually save both time and profit by taking that investment into taking it seriously. Because that's the bigger rule of everything, right? It's the same with your business where you had to invest to start it to actually make it work for you. So really start using your waste as business intelligence, and like I said earlier in the episode, don't think it's too crazy to see what actually is in your bin or what bills you are actually paying per month, and if it's actually reflecting how much you use. So are you actually ready to find some profit hiding in your way in your bills or in your trash? I would love to think about this together with you. If you would like to have a call about it, check the show notes, hop on a call, we can discuss what we can do for you and what probably is going to be your biggest waste. And let's get your waste working for you. Alright, short and snappy. See you in the next episode. Thank you for listening, and congratulations on investing your time today to think strategically about your future, to make sure you never miss a step to understand sustainability better, how to grow your competitive edge. Follow the podcast right now, and if this was helpful, please leave a five star rating. It will help other people like you to find these tools. I'm Samantha Smith, and I'll see you in the next episode.