It’s the invisible expenses that hurt your business the most – he amounts that sneak under the wire of your business accounts every month or quarter. And even if you were asked point blank to name them all, you just couldn’t. But who cares, right? They are just small expenses – subscriptions or memberships probably. Besides, you never know when they’ll come in handy.
C’mon, get serious! As soon as you start losing respect for your hard earned money, no matter the amount, you’ve started your descent on a very slippery slope. But all is not lost, after all it’s only a small amount… or is it?
How much money are we talking?
Well you tell me. I personally went through an exercise, call it a self-audit if you like, some time ago and was shocked at what I found. Now to be clear, I’m not referring to snacks or casual drinks with friends from time to time. This is certainly not about curbing your lifestyle. It’s simply about looking hard at where your money is going and a fair sum of it may be heading down the gurgler wrapped in unused subscriptions and memberships.
Some context: I love tech, I love being on the cutting edge, I feel it’s absolutely necessary to work smarter in order to enjoy all life can offer. That definitely means enlisting help from some carefully selected apps. The problem is, we’re not always as careful as we could be. I’m not saying I bought a dud or subscribed to something that doesn’t work. I mean that too often, I got caught up in my own good intentions. I always intended to trial apps, make notes, carefully assess how they could be integrated into my business life with a view to freeing up more time. But I would never got around to it. By the time I did, I found that the free trial period had expired and I had already paid for 4 months before I realised I still had it.
Thinking about the costs, too many people take up the free trial of a promising piece of software and possibly take up a membership to an enlightened collective of likeminded thinkers only to be blindsided by a busy period at work. A few months pass and suddenly they realise they’ve been paying for 3 or 4 subscriptions and membership fees to something they hardly ever attend, to the tune of $235/month. That’s usually just the start!
Ok, I want to bank that cash, how do we do this?
You can actually do this yourself and/or sit down with your accountant for an honest chat about what it is you’re actually trying to achieve. Here are the key three steps.
- Remind yourself about what it is your business needs to achieve (tip: think vision, mission, values and your magic number – the earnings your business needs to pay you (properly), your team and expenses including tax, paying down debt and contributions to your “war chest”)
- Identify any and all expenses that directly benefit your business by advancing you towards the sustained achievement of your magic number
- Eliminate ALL other expenses. You will discover those unfamiliar looking but regular direct debits to “somethingtech” and “CU There meet-ups” as well as emags that come floating past your inbox and are almost instantly incinerated by your firewalls.
It’s all got to go because it’s eating into your precious profit as well as whatever you were going to put on the family dinner table tomorrow night.
Take breath, take a look and take a scalpel to all those unwanted, unneeded expenses hiding in plain sight and put that money towards your cash flow.