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Running a Business Off the Smell of an Oily Rag

Times are tough for those in business, and there are lots of us in business. But never fear, when times get tight, there are lots of oily rag ideas to get us through in good shape.

 Read more Oily Rag articles by Frank and Muriel Newman

Times are tough for those in business, and there are lots of us in business. According to the last census there were 330,000 businesses in New Zealand – 87 percent with five or fewer employees. But never fear, when times get tight, there are lots of oily rag ideas to get us through in good shape.

One reader said, "I have introduced an oily rag mentality throughout my business. Everyone in the business has benefited. I have shared the rewards with staff so they are now being paid more and the business is more profitable so their jobs are more secure, and I am doing better too. It's a win-win." Another said they increased business profit from $20,000 to $50,000 in a single year!

So here are just some of the many ideas to help you run a business off the smell of an oily rag.

  • Can you relocate your office into your home or workshop into a garage? If you have too much space, trying renting out a room or part of your workshop. If you need an office, what about sharing space with others and combining the secretarial services. This cluster arrangement works well for businesses operating within the same industry.  
  • Sell any business assets you are no longer using – things like unused plant and machinery or office furniture. Assets sitting around lose value and take up space which costs money.
  • Chris writes, “Eliminate telephone costs by using Skype”. A reader says, "Skype is free to download from The cost of the calls is: Skype to Skype: zero, anywhere in the world.” Calls to landline and cell phones do cost – see the Skype website for details.
  • C.K. from Christchurch says, “If you have a computer and use the internet – check out how many hours a month you have used over the last year.  You may be paying for too many.  We were paying for 250 hours with one of the major ISPs and we now have gone to 150 and saved money.”
  • P.P.  from Auckland says, “I bought a huge number of envelopes on Trademe for $10.50 (including postage). The normal retail was $250! That means $240 added straight onto the bottom line!”
  • If you are buying thank-you gifts in bulk for staff or contacts, find out what the wholesale price is and negotiate with your supplier.
  • Save on printer ink by using the ‘draft’ print setting.
  • Recycle rubbish so you are paying less to dispose of general waste. Where possible use it in your own business – for example, using recycled cardboard for packaging.  
  • If you are being charged on a time basis (by every 6 minute block or part thereof by lawyers for example) then don’t waste their time and your money by talking about the weather or the latest All Blacks game.
  • Make sure airpoints gained on business travel are used for business travel. Crediting them for private use creates an incentive for people to travel, at your expense, when the good-old telephone or email would do.
  • If you or your staff, regularly stay in motels negotiate a corporate rate. One motel chain had a corporate rate of $125 compared to a "list" rate of $185.
  • If you have spare capacity in your business, try taking on new products to bring in a new income stream without adding cost.
  • Make someone within the organisation responsible for reviewing all costs. Have them keep a record of how much they have been able to save, and reward them with a bonus if they do well!

Running a business off the smell of an oily rag is really about asking the question: can it be done cheaper with the same or better results? Doing this is good for everyone – you will increase your profits, your staff will continue to have work, and your customers will be able to buy your goods at a price cheaper than your competitors.

If you have a favourite money-saving business tip send it in to us so that we can share it with others. You can contact us via the oily rag website ( or write to Living off the Smell of an Oily Rag, PO Box 984, Whangarei.

* Frank and Muriel Newman are the authors of Living Off the Smell of an Oily Rag in NZ. Readers can submit their oily rag tips on-line at The book is available from bookstores and online at