Reducing Your Expenses and Protecting Your Cash
Apr 01, 2024
83% of small business owners are operating on a month-to-month cash flow basis.
Pause for a moment and let that sink in. The weight of this reality bears down on the vast majority of us, small business owners, shaping our daily decisions and fuelling a constant undercurrent of stress. 😬
I remember far too well what it feels like to wonder if and how all the bills in my business would get paid. Honestly, I was fortunate for years...I didn't experience this cash flow issue until 2017, but I when I did...I felt like quitting. The stress was overwhelming and for the first time, I was worried about the longevity of my business. I had two choices....sit and dwell in the stress and do nothing or change my mind set and figure out how to turn things around. I'm assuming you can guess which path I took.
Let's start off with defining an expense first.
An expense is a cost that is incurred during the operation of a business. Expenses are the outflows of cash that is used up or consumed as part of the day- to-day operations. This could include rent, utilities, packaging, support subscriptions, etc. Excessive overhead costs can strain you finances, especially if revenue fluctuates.
Now my question to you is, how often do you review your expenses? I mean really review them...going through them one by one? I would HIGHLY suggest a thorough review and determining which expenses could be reduced or eliminated altogether. Are these expenses providing some sort of return (which I call an investment) or are they secretly eating away at your profit?
Here are some examples of expenses to review:
Rent
Cleaning service
Office supplies
Payroll (overstaffing)
Insurance rates
Memberships or apps that are no longer being used
Custom shopping bags
Bank fees card fees/payment processor fees
Travel and entertainment
Debt refinancing or consolidation
Many business owners don't even realize that they can negotiate their credit card rates. Is it a guarantee? No. Worth a try? Heck yes! I had my rates lowered several times over 18 years.
Please don't just do this expense check once and forget about it. Make it a regular thing, ok? Keeping your business strong and around for a long time means staying on top of your cash constantly. It's all about being smart and proactive with your money. Doing this sets your business up not just to "hang in there" (mediocracy is not my thing), but to THRIVE 🖤
