If you set out your goals and objectives for the year like I have then they should still be fresh in your mind. I hope that you’ve placed them somewhere in front of you so that you can see them every day when you wake up and get to work. One of my annual goals has always been to save 10% on my existing expenses. If you quickly eliminate 10% of your monthly expenses at the beginning of the year think about how much you have just made. If you aren’t paying it out to other vendors then it’s money that you can keep in your business and ultimately pay yourself with.
Here Are the 5 Techniques that I Use to Focus on Saving Money:
1. Review Your Checking Account Thoroughly
One of the fastest ways to save some of that 10% that you need to save is to pull up 90 days of bank statements. Review each charge carefully, especially the ones that reoccur monthly. If you don’t remember what they are or can’t immediately justify the expenses with revenue that it generates for you then CANCEL THE SERVICE! Don’t wait for a better time, go to the site, call, or take whatever action you have to take to eliminate the charges. If you can’t remember what you signed up for, then call your bank and they can help you eliminate the charge or track down where you need to call to get this service removed from monthly billing.
Don’t wait, act now and get rid of that unneeded expenses!
2. Eliminate Services That You Haven’t Used in 30 Days
Once again, look through any services that you are getting monthly invoices for and see if you have actually used them in the past 30 days. If you haven’t then it’s time to remove the service or do what I describe in step three. My mother used to tell me this rule of thumb when I was sorting through my belongings; “If you haven’t used it in a year get rid of it!”. She was right. With business you have to act much sooner than a year, think about it, even a small $25.00 per month fee ends up being $300.00 in 12 months. Stop it now, eliminate the service if you aren’t using it.
3. Trim Down Existing Services
As you review your checking account and other monthly services that you use you may see services that you originally needed full access to at full price. Now, with a shift in your model you may only need part of the service or part of the time you originally paid for with the vendor. If that’s the case then pick up the phone and call the provider. Adjust the service to what you are using and eliminate the extra unused portion of the service. Even if you are in a long term contract most vendors, when you explain it carefully, will see the value of keeping you as a client at a reduced rate over losing you completely. Looking forward always be careful with contract terms. Things can change overnight in business and you need the flexibility to adapt your model. Don’t lock into something long term that you can’t afford to honor.
4. Turn Down the Heat
This is an obvious tip, I know, but in reality, it’s something you should do. Unplug the extra appliances, computers, screens, and electronics that you don’t need. Turn of your LCD’s at night, and turn down the heat. Use less water, and turn down the hot water tank. If you take 10 minutes today to write a best practices list for power usage and you walk around and change how you use power and heat you’ll see a difference. Remember that $20-30 a month can add up quickly in expenses or savings. Take action on this now, it’s worth the savings, and it’s worth it to be more responsible with the shared resources that we all utilize.
5. Eliminate Wasted Labor
Eliminating wasted labor is something that is easy to do if you have the guts to do it. Seeing wasted labor resources doesn’t have to be difficult. Act wisely when you move to implement the changes you have to make in the labor area. Take your time and be gentle. This is a change that personally affects you and your team. Where is your wasted labor? Maybe you:
- Have let hourly staff clock in a few minutes early unnecessarily.
- Have scheduled a work day that starts before your clients need you. Starting at 10am could make more sense than starting at 8:30am.
- Have hired someone for a full time position when it was really a part time position.
- Have allowed overtime hours to be paid too often. A policy change could be in order.
- Have over paid for contract or part time labor, consider effective outsourcing.
Whatever areas you have overlooked in the past now need to be carefully and thoroughly considered. It’s possible and important to shave some of the cost off of your labor force. As hard as it is to let a team member know that you have to move them to part time, or in some cases eliminate the position, you have to take action on this. If you don’t handle your finances wisely and proactively there won’t be any finances to handle. You’ll go out of business.
A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life. ~ Suze Orman
To lead and grow your business you need financial freedom and peace of mind. Take control of your finances today and don’t leave anything to chance. If you take action you can succeed.
As small business owners it’s easy to become overwhelmed with day to day tasks. One of the first things I see young small business owners do when they are overwhelmed is withdraw from customers. This is probably the worst thing that could be done. Your customers are the life blood of your small business.