7 ways to cut back your business expenses

How you can reduce the expenses in your business in 7 easy steps

Transcript

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Hey, gorgeous recovering perfectionists, I'm Claire Riley, and you are listening to episode number 69 of the Recovering Perfectionist Podcast. You can head over to clairy.co forward slash pod forward slash 69 for the show notes, which will outline the key takeaways and give you any links that I talk about as well. And today I'm really excited to be talking about some money stuff in business. Hashtag not an accountant, not a bookkeeper, but I'm pretty passionate about the money stuff in your business. I'm going to talk about how you can reduce your expenses in your business in seven easy steps. This is the Recovering Perfectionist Podcast, and I'm your host, Claire Riley. Alrighty, so the first step to understanding where your money is actually going in your business is to have some really sexy and simple reporting systems in your business. So one thing that I notice with people who I work with a lot and who I chat with in the business world is that reporting is a bit of a dirty word. I totally get it. Traditionally, reports are usually pretty boring and we don't like to think about them. However, when it's your own business, it is absolutely critical that you know what's going on with your money going in as well as going out. So having some really basic reporting strategies, whether you're using a bookkeeping software like Xero or NYOB or QuickBooks or anything like that, or if you're just using an Excel spreadsheet or however you're doing your bookkeeping, it's really important that you put aside some dedicated time at least once a month to look at your profit and loss. So if we just keep it super, super simple and we're not going to talk about income today, we're just talking about what's outgoing, you get a really good idea of what you've actually spent money on. The worst thing that we can do is get to the end of tax year and realize that we've been paying all of this money that we forgot we were paying or we didn't realize we were paying or that we shouldn't have been paying. And it's money that ideally could be in your pocket rather than somebody else's. So, number one is to have some beautiful reporting systems or have someone who can do that for you and give you the information so that you can make the decisions that you need to as the CEO of your business. Some of those things that might happen when you have done your reporting and you know where you stand and what you're spending money on and what's going in and what's going out and that sort of thing is number one, to have a look at your subscriptions. Now, subscriptions are one of those things that, especially we're in startup mode, we tend to get shiny object syndrome and we feel like we needed to subscribe to that, and we need this tool, and we need that app and we need this software and all of that sort of thing, and then we forget to use them or we stop using them or we realise we don't like them, but we let the subscription continue. So we keep paying for something that's just sitting there in the background, which means there's money in someone else's pockets instead of ours. So having a list, I use a signer for this, and every time I sign up to an EOU subscription, as well as every six to 12 months, I review all of my subscriptions. What am I paying for for my apps, for my domains, for my website, um, um hosting and all of that sort of thing? Are there any courses or memberships that I'm a part of as well? And having a look at them and having a really clear list to check in with every few months is really, really important. When you know what they are, you can make decisions about whether you're on the right level and you need to upgrade or downgrade or delete it altogether, or if it's actually working for you and you want to keep it as it is. Often there are free versions of these things that we need, and we're actually not using any of the inclusions or elements of the higher levels that we might be paying for, so you can downgrade them. And sometimes there's a free version that does just as good a job that we could switch to without having to pay this one as well. So you can make some decisions there. The other one is any courses and that sort of thing. So we often sign up for memberships or um subscription services or courses and that sort of thing that are on a rotation where you're just paying month in, month out, or every six months, or every 12 months, or something like that. And doing a really good stock take or audit on what those things are can give you again some insight into what you might need to cancel, stop paying for, like the gym membership that we pay for, and then we never actually go and use the gym. So just get clear on any of those subscriptions that you can either downlevel, cancel, upgrade, change, at least just be aware of where that money is going. All right, the second tip is to ask for discounts. So these sort of things don't apply everywhere, obviously. A lot of places are going to knock you back because they have pricing structures and that's totally fine. However, you might want to look at things like your bank bank accounts, insurances, and even venue hire and ask if there are any discounts available. Um, often these sort of places will review your what your costs are and what level of coverage you have, for example, and what your structures are. And you can actually get a discount if you review these each year. I like to have this as a yearly activity that I do, and I spend half a day. I do it for all my personal stuff as well, and I call around for my car insurance, my business insurance, any of those other big things that I'm probably not going to get too much joy if I call them every month and ask for a discount, but once a year I can call and have a review, make sure I'm still on the best deal. You can absolutely do that for your business as well. So that's the second thing is to ask for some discounts. The third thing, which is a really big one, um, that often requires a bit more review. And again, having that insight into where this money is actually going is really important. And this is all about your team. So whether or not you have one VA who works for a couple of hours a week, or you have a team of two or three or more people, it's really important to just do a bit of a review about where your money is being spent on your team expenses and if you're getting a good ROI, which is return on investment. So things that you might want to look at is have you got the right person doing each of the functions? Are you paying a manager, for example, to do some basic admin function that your VA could be doing, or vice versa? Are there things that your VA is spending time and that you're you're paying for, which really is just a quick decision that a manager in your business could make or that you could make? So just getting really clear, have a bit of a look about, um uh look around with things like job descriptions, or if you've got a bit of a list of uh delegations and what tasks or functions certain people in your team is um uh responsible for. And also looking at any project expenses. So if you've got a big project coming up, you might go out and get a couple of quotes and look at someone who can come in, do the project, get it finished, and hand it back over to you, may be more efficient and cheaper in the long run than getting your current team to do any upgrades and that sort of thing. So always have a look at those. You've got to know where you stand in the first place. So that's that one. The fourth one is to always separate your personal from your business expenses. Goes without saying, but this sometimes comes as a big shock for people. So it doesn't matter if you've been running your business for five minutes or five months or five years, if you are still doing your business and personal expenses and or banking and everything like that together, please, please, please, please, please separate them. It makes it much easier for you to make decisions about paying yourself and paying for different things and what your profit and loss actually looks like versus your personal income and expenses. I won't go into too much more about that because as I said, hashtag not a bookkeeper, not an accountant, but it makes your life much easier and you can definitely control your expenses when you can see what the difference is between your personal and your business expenses as well. The fifth one is to go paperless. So most of us in online business are largely paperless these days anyway, but things like printing can get really, really expensive with paper and the environmental cost of paper and that sort of thing, as well as ink and printers and all of that sort of thing. So making small changes to your business processes, maybe how you take client notes or how you take actual notes can definitely make a big difference to your bottom line with going paperless. So have a bit of a think about a strategy for that if you are still using lots and lots of paper. And the last one is to make sure that you have got some people on your money team, whether these are bizbesties who are also money aware and know what's going on and some systems and processes. I personally use Barefoot Investor for my personal stuff and uh Profit First, which is Mike McAllowitz's Profit First in my business stuff, and they work really beautifully together. But I also work with a really great tax accountant, and around, you know, a couple of months before the end of the tax year, we get in touch and we talk about, you know, is there anything I need to do to minimize my tax, or is there any assets that I should look at buying because it's now a good time, or you know, just getting some really good insight with that. Um, also financial planners, bookkeepers, accountants, all of those sorts of amazing people who can really advise you on the best ways to minimize your expenses and that sort of thing throughout the year, not just right before tax time. So I'll just go through those again just to wrap them up. They'll also be in show notes at clairey.co forward slash pod forward slash 69. But overall, we really want to have a really great reporting structure and system for our money in and out. We want to look at our subscriptions, we want to ask for discounts on a regular basis, have a look at your team expenses and make sure that your money is getting your good return on investment with your team. Um, always separate your business and personal expenses and all of your money stuff. Go paperless as much as possible and make sure you've got some amazing money people in your corner. And that's it. So I hope that's been helpful. As always, love your comments and input and feedback. So do leave a comment if you would like to, or shoot me an email, hello at clairey.co. I'd love to hear from you. Until next time, I'll see you on the next episode. Bye everyone.