If your money isn’t stretching as far as it used to, chances are you’ve allowed “budget creep” to infiltrate your company’s resources. Here’s how to eliminate that problem — fast!
It’s an issue that negatively impacts your bottom line: UNNECESSARY EXPENSES.
You see, the bigger your business is, and the more people, projects, and activities you’re managing at a time, the more difficult it can be to ensure that your money is working hard for you!
If you’re like most business owners, the bigger expenditures get your attention as you go, but smaller spending — those small monthly subscriptions — can slip unnoticed under the radar. And that accumulates faster than you think.
In fact, I’ve found that plugging the leaks in your cash flow can easily add 10% or more to your bottom line. So, it’s time to pay attention to those small expenses and save yourself big-time money.
Here’s how to do it…
- Change the way you think about overhead expenditures. What I’m about to say may constitute a radical shift in the way you think about your business, but I’ve seen it free up tens or even hundreds of thousands in my clients’ companies each year. Here it is:
There is no such thing as a “cost of doing business.”
Yep, you read that right. If you’re running your business correctly, “overhead expenditures” do not exist!
As Peter Drucker says, a business exists to do two things and two things only: GET AND KEEP CLIENTS. That means you need to treat each expenditure as if it were an investment…because it is.
2. Evaluate each of your current investments. Look at where you’re spending each month and apply Drucker’s advice by asking yourself: “How does this contribute to getting or keeping a client?”
The answers will be eye-opening.
As you go through the list, you’ll get some clear “yes” investments, some clear “no” investments, and some “don’t knows.” Table the “don’t knows” for later.
3. DROP ALL THE “NO’S.” When you find expenditures that are neither bringing in new business nor helping you keep existing business, drop them. Fast!
4. Go back to the “don’t knows.” After you’ve freed up significant revenue by dropping expenses that aren’t paying off, you can go back to the “don’t know’s” and re-evaluate. if you find yourself on the fence about a given item, ask this second question (again from Peter Drucker): “If I wasn’t already doing this, would I start today?” The answer will help you determine whether or not you should continue investing your company’s financial resources in it.
5. Teach your employees this method for evaluating future investments. One of the most powerful things you can say to your team when they bring you new expenses is this: “Interesting idea. And how will that help us get or keep clients?” Really listen to what they have to say. Then make your decisions accordingly.
TAKE ACTION NOW: Go through your budget, step-by-step, and make the necessary cuts in your business. Chances are, by the time you’re through, you’ll have freed up some much-needed cash!
If you’d like some help cutting costs (or with any other aspect of running an efficient, successful business), I invite you to book a 15-minute call to discuss business coaching. We’ll review your individual situation and help make profound improvements fast!
You can book a complimentary 15-minute call with me at TimeWithShane.com.
