New Year's resolution check: How's that diet going?
Oh, the promise and hope of January! That month of the fresh start, the new beginning, the diet! What was it this year? I tried some Atkins, a little cleansing, a few days of Dryuary. (Those were long days!) And before I knew it, it was the second week of the month! Yeah, I didn't make it too far before my clean slate was not so clean. So that's why I like to revisit my resolutions a couple months later to evaluate and try again. The same is true for my business. However, when it comes to putting my business on a diet, I'm often more successful than I am in resisting a good donut. Or a cocktail. If talking in dieting terms, I like to look at my balance sheet as calories in, calories out. And one of the easiest ways to cut calories is to cut operating expenses.
I know this isn't groundbreaking news to you. You've heard this before. But I've also heard about cutting carbs before. Doesn't mean I'm not planning to have pasta for dinner tonight (with pinot noir), and that I just ate it for lunch! So it certainly doesn't hurt to be reminded of the helpful things we already know. OK, enough talk of food. Back to business! As I was saying about operating expenses, you can think of them as the low-hanging fruit. (Sorry, another food metaphor. Didn't do that on purpose, but it totally applies in this case.) Decreasing or eliminating unnecessary — or unnecessarily high — expenses will make an immediate impact to your bottom line. If you're revisiting your resolutions and looking for ways to "cut calories," this is an easy, low-hanging-fruit place to start.
I spent how much? Know your operating expenses!
Take a look at what you're spending on insurance, your phone system, credit card processing, electricity. Figuring out how much you spend on these items is probably as simple as looking at a bill or statement, no tricky math or spreadsheets with calculations required. What about office supplies, payroll processing, printing, expenses related to driving, Internet? Can you reduce your spending on any of these items? Maybe you can switch providers. Or maybe you can be more thrifty in your daily practices — and make sure that your staff is, too!
The other component you need to address is whether or not you have a system in place to track your operating expenses. This is crucial! Think how much time it would take to tally up all your various costs — the obvious and the not-so-obvious that you have to think about and research — if you have no way of referencing this information at a glance. Meanwhile, you could be bleeding money left and right and not even know it! So getting a system in place to code your expenses is essential. If you don't have one yet, make that your resolution for the rest of this year. If you already do (yeah for you!), then put that system to good use by referring to it often. Compare your spending with your revenue... calories in vs. calories out.
No one loves dieting. But if you think of cutting operating expenses as putting your business on a diet, you might be able to picture yourself having a leaner, meaner company in a few months. And that's something you can celebrate, preferably with a big bowl of ravioli and some nice wine (or vodka). Because January and Dryuary were so one month ago! Besides, you're not the one on a diet!
Get specific about your spending!
In my book, But Are You Making Any Money?, I detail the process of how to set up a coding system to track all of your costs. This is the best way to know if you're doing a good job of keeping your business on a diet! To keep you on track with this, check out some of the quotes we have for this week, including ones from yours truly! They offer different perspectives on getting started with controlling operating expenses. Check out 21 Suggestions for Success from H. Jackson Brown, Jr. for more inspiration and One Minute List.
Check out the summary of last week's business tips and motivational quotes from my Instagram page which you hopefully got to see in real time! If not, let's make sure we're following each other on Instagram!! So...here is this week's roundup of Instagram images of My Top Business Tips and Motivational Quotes.
Operating Expenses – Tip #1:
Love this? Pin it to your Business Tips Board.
"Shop around to find better fees on easily forgettable expenses like processing credit cards, insurance and phone carriers."
Operating Expenses – Tip #2:
Love this? Pin it to your Motivation Board.
"Job costing helps identify the trouble spots so you can actually fix them, instead of thinking that your whole company is in trouble."
Operating Expenses – Tip #3:
Love this? Pin it to your Quotes Board.
"Be a self-starter."
Operating Expenses – Tip #4:
Love this? Pin it to your Business Tips Board.
"A year from now you will be glad you started today."
Operating Expenses – Tip #5:
Love this? Pin it to your Motivation Board.
"When you spend some time tracking your activities in detail, your life becomes more streamlined and focused. You can let go of some things because you know where it's best to put your time."
Do you have a plan? I want YOUR stories on how you were able to cut operating expenses!
Have you revised your business plan lately? What's your plan for financial success? Which tips above did you find helpful? I would LOVE to hear from you!
Anyhoo...I publish these business tips and motivational quotes to get you fired up for your work week! And, if you want more business tips, get my book, But Are You Making Any Money? or contact me to really take your business to the next level!
xoxo M
P.S. Of course that's not all we've got! Searching for more small business tips about financial success?
Then definitely take a look at these:
6 Pesky Expenses That are Often Forgotten When Starting A Business
Wrap Your Arms Around Your Expenses
I'd love to hear your ideas! So please comment below and then SHARE!
My advisor told me how to make $40k extra a year. I couldn’t believe that was possible with one move. It was to get rid of our office, which in my estimation was only used 1/16 of the time (counting nights/weekends and days people worked from home, etc.) Instead of going completely virtual, we moved to a WeWork where we have 3 dedicated stations and the rest can work from anywhere else in the building. It’s vibrant, cool and so much fun as well as being 1/2 the cost of our old spot. Genius.
Way to go! Those operating expenses really do add up and you have proven that making just one change can make a HUGE difference to your bottom line!
This is a very interesting article. Thanks for sharing. I will follow your tips. I think that this will help me with my expenses.
So glad you like it! Be sure to check out our other blogs!