In an ideal world, a company would keep unnecessary expenditures at a minimum.
It is incredibly easy for small costs to add up over time and present a rather unpleasant surprise to a manager who has neglected to keep track of smaller recurring expenses.
Coffee falls under these smaller recurring expenses. My experience in the film industry – which often requires workdays exceeding 12 hours – allowed me to notice that the use of petty-cash to purchase up to six coffees per day has become so normalised, you might say it is part of the culture.
I will present a quantitative analysis of the potential savings a company might realise from purchasing an automatic coffee-machine. Will the cost of a coffee-machine and coffee capsules be justified by the cost-reduction of not buying coffee at a café?
The following assumptions will be made in this analysis:
-The company consists of 10 employees, all of whom drink coffee
-Each employee drinks 2 coffees per day
-The month consists of 21 working days
-One cup of coffee at a Café costs R25.00
-A coffee machine costs R2000 on average for an adequate machine
-One coffee capsule for the coffee machine costs R5
-Milk costs R26 per week
-Sugar costs R55 per month
-Inflation and machine maintenance is not taken into account
I was unable to commit enough time to do sufficient observational research to determine the actual amounts of coffee consumed in the workplace. My estimation is based on experience and, in my opinion, is very conservative especially in the film industry.
The results would suggest that switching from café purchases to in-house coffees is the more suitable option if the company is focused on minimising expenditure.
In the first year of switching, a company could save R113,920.00.
It’s worth noting that the percentage saved over the years increases. Even though the yearly savings are subject to decreasing marginal yearly savings, with more accurate information the year-on-year percentage increases may be significantly larger.
Some companies – especially those located in high-density population areas such as city centres, in my experience – value the culture associated with, and interactions resulting from, stepping out of the office and popping down to the café on the next block.
It may be argued that requiring employees to use an in-house coffee machine, or pay for coffee from a café using their own money, would dampen employee morale, resulting in decreased productivity. Avoiding this decreased productivity may justify the expense on café coffee.
Industries in which output is easily quantifiable and measured would be able to determine whether café coffee expenditure is justified by the level of morale and, therefore, productivity that accompanies it. However, industries in which output is not easily quantifiable and measured would have a difficult time determining whether this cost is justified.
The purpose of this article was simply to highlight that a rather simple change in an organization may result in astonishingly large benefits, especially in the long run.
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