5 Non-essential costs you can cut from your business right now.
“My business is not making enough money, and I don’t know what to do.” We hear it all the time. Instead of ignoring the cause of the problem, it is time to put the brakes on and review the non-essential costs.
When faced with cash flow or profitability issues, most business owners first reaction is to try and find new clients or customers. Feeling desperate, they totally forget what their ideal client is and what their business values and vision are. They then get excited by accepting a complete random as their next client, despite the lack of cohesion with their business brand.
Often what is overlooked, is analysing costs and thinking about which non essential costs you currently have, which can be instantly reduced or even eliminated. This process does not require new clients, more hustling, or god forbid increasing costs just to try and increase your bottom line.
“Reducing non-essential costs, which don’t impact positively on revenue, is like striking gold.”
So here are my list of 5 things I want you to review in your business and ask yourself….are these costs helping me generate revenue or grow my business?
1. Subscriptions – have you really looked at what online tools you subscribe to? Software subscriptions can quickly snowball and often I have clients tell me they don’t even remember signing up for things that they are paying by direct debit each month. Do a sweep and clean out anything you haven’t used in the past three months. And if you don’t remember your login details to the programs, don’t ignore it, put in the effort to contact the supplier and cancel your subscription. You clearly are not using it.
2. Magazines & Books – as business owners we continually need to undergo training and development. But do I think my sales will decline if I stop reading them? No. Whilst I love reading them, if I have to cut costs, those feel good magazines and books can be reduced or eliminated…even just for a few months to really see if I can survive without them. If you find you can’t live without them – get a library membership or borrow of your business besties. A much more cost effective way to learn.
3. Networking – yes I totally love chatting to other business owners but remember not all events are created equal (god, some are downright horrid). Take a moment to think about the type of event, the type of people who will be attending and whether or not your ideal client will potentially be in the crowd. Find what works for you and keep it consistent. Shelling out every week on networking might seem like a great idea, but narrowing it down to one valuable event per month is by far more meaningful.
4. Stationery – now coming from a stationery-obsessed person this is really hard for me to write! But lets face reality – will my clients know if I buy a $10 fancy pen or a $1 pen – absolutely not. Will it matter if my calculator cost $55 or if it came from the Officeworks bargain bin for $2 – absolutely not. Focus on what you need and buy the product that will do the job in the most efficient manner. If that means having some basic stationery (that no one will see anyway) – then you have my blessing.
5. Home Office Costs – again, I used to be very guilty of this one. Buying “pretty” things for my home office to make it feel like a much nicer space. With the likes of Typo and Kikki-k it is often hard to say no. But do I need to buy a $400 print to put on the office wall, do I need a high back leather reclining chair. Absolutely not (but secretly yes!). Whilst I agree that having a nice works pace gives you clarity and makes the working day more enjoyable, a $10 wall print from Kmart will have the same effect on my income as something far more expensive.
“If you want to reach your financial goals in those start-up years, you need to be honest and ruthless with your costs. Your business longevity depends on it.”