One of the easiest ways to increase profits is to decrease expenses. It’s a logical step that many business owners neglect because they feel befuddled by finances or have “abdicated” the role to their bookkeeper or finance person.
Too easily, we can be seduced by the idea of upgrading our marketing and technology to increase clients and revenues. However we forget that there’s a simple process that provides quick results.
A Recipe that Works
We give our expenses a frequent look throughout the year. We ask ourselves “are these expenses maintaining or attracting customers?” If each expense isn’t doing the job we wanted to accomplish, then it gets serious analysis for being eliminated. Each expense should help return a profit.
The discipline of revisiting all expenses, no matter how large or small, is an important business owner “muscle” to keep in shape.
There’s nothing like keeping your finger on the pulse of your business by looking at expenses. It will help you keep connected to the heartbeat and health of your company – the financials.
The good news is that its not complicated!
Give Yourself a Gift that Gives Back!
We’re now at the end of the second quarter. Look at your expenses and decide if each one is giving you the return that you want. Look at every magazine membership, advertising charge and networking lunch, etc.
Don’t continue paying for them because they seem like a good idea. Give them a performance appraisal just as you would for any of your team members.
Is each expense performing to the standard you’d expect? If not, then prepare it for elimination.
We’ve done this exercise over the years and have found that there are memberships or apps or software charges that were no longer a good investment. Case in point– eFax! A small charge that became irrelevant, as technology evolved. Gone!
A Word to the Wise
As my business mentor, Keith Cunningham says, each expense should either maintain or attract clients. If each expense is not in support of that goal, it should be considered for elimination.
Take Action Now:
- Get a printout of your expenses from the last 12 months.
- Give each line item a “performance review” and determine if it is creating value for your business or not.
- Eliminate expenses that are no longer relevant.
- Celebrate your success as you go lighter into your third quarter!
It’s time to go on a “diet“ and figure out where you can lose a few “pounds“ of unneeded expenses. I’m sure you’ll feel sleeker, slimmer and more in touch with your financials.
Enjoy the extra money in your “pocket”!
To your success,
Karen Logan & Team Renaissance
PS: We can help you review your expenses to grow your business bottom line and achieve your goals. Contact us for an appointment.