Here's one short tip on how to reduce your fixed costs.
If you follow it, it’s possible you can immediately increase your cash earnings.
It will take about 2.5 minutes to read, between 2-3 hours to implement and the average business could find cost savings of $3,000+ every year for many years to come.
It’s an idea that saved one business $5,000 within 12-months.
Just from reviewing one fixed cost item.
The Problem of Fixed Cost Bloat
If you're anything like me, new costs are added to your business all the time.
Prices increase, or you add an entirely new expense to add to the ones you’ve always needed.
Plus, you’re constantly being pitched new services.
So every year new services are needed, and the old bills just keep coming in.
Electricity, water, insurance, phone, internet, business software and various subscriptions to this and that. You name it, the list is almost endless.
Costs grow and grow and add up to a great sum over time.
Recently, I've performed a simple exercise to pare down my costs and now spend $250 per month less to run my business. This was just by looking at the basic costs just about every business incurs, and I’m sure you can find many more opportunities.
Just by cutting some costs, and renegotiating others. Whether you have a short amount of time, or a bit longer, I’ve got you covered. Here’s how:
How to Perform a Rapid Cost Reduction
If you have a short amount of time, try this:
Step 1: Collect your data
Download your latest bank account statements.
Step 2: Cancel unused expenses
Run through your recurring expenses and determine if there are any that are unused, or can be cut without impacting your business.
Immediately cancel these items.
Good examples include software subscriptions and subscriptions to information products.
Step 3: Renegotiate large expenses
Find the three largest expense items that can be easily renegotiated.
There are expenses where you are not locked into a contract and can switch to a different provider on a better deal. Spend some time researching online or talking to brokers so you can renegotiate or switch providers for these items.
Ask for a better deal from your existing provider, or make the switch.
Good examples include electricity, insurance and your phone and internet bills.
A More Comprehensive Cost Reduction Idea
If you have more time to invest, try this unique way to constantly monitor your costs and keep them in check:
- Turn your credit card or banking notifications to $1
- Change your process to approve all other business expenses yourself
- Watch for trends and other important things about your business. Most likely the legacy recurring charges that aren’t relevant or haven’t been negotiated in a while.
- Continuously cancel, trim and renegotiate charges, where relevant.
This way you will learn where your money is going. As much of a pain as this is, knowing the rhythm of your business is essential.
The sooner you do this, the sooner you can turn off the notifications!
I hope you have had a fantastic week in business and in life. Now go keep doing the small things that add up to a big difference for you and your business.
But wait, before you go…
We all know that small business is about doing the little things right.
The little optimizations, the high-impact tweaks and the 1% gains you can make to your business to make it a little better, a little more profitable and even a little bit more pleasant to run.
I have interviewed 500+ business owners, surveyed thousands more, and I am always probing for their best tips, tricks and hacks to improve their business. There are three that stand out above the rest and I want to share them with you.
Join my email list for free and I’ll send them to you right now.