19 Oct PLUGGING THE MONEY LEAKS
Plugging the money leaks.
What the heck does that actually mean?
Plugging the money leaks is a strategy that I recommend all of my clients, in fact, all business owners should do on a regular basis in business.
So what is it actually to “Plug the Money Leaks”?
Plugging the money leaks is a strategy where you as the business owner reviews on a monthly basis the expenses going out of your business.
As you review each expense you ask yourself the following questions:
- Is this expense 100% necessary for my business to open it’s doors?
- Is this expense saving me money?
- Is this expense saving me time? or
- Is this expense making me money?
Using coloured highlighters, you review each expense and highlight them in the following way:
- GREEN – those expenses that are 100% necessary for your business, saving you time, money or making you money ]
- ORANGE – those expenses that are necessary for your business, however you are most likely able to get a better deal if you did a review of the expense, think about your telephone plan, your insurances etc.
- RED/PINK – those expense that answer NO to all of the questions above.
Those expenses you highlighted in RED/PINK must be stopped/cancelled straight away or as soon as possible as they are MONEY LEAKS.
If you’ve been into business for a while, it’s possible that you could save yourself thousands of dollars by taking the time to implement this strategy each month.
If you’re just getting started or have only been in business for a short time, it may not be that you save lots of money right now from your bottom line, but by getting into the habit of doing this process on a monthly basis, you will potentially save yourself money, lots of money over the life of your business.
Expenses tend to creep into a business, especially as sales start to grow and if you don’t keep a close eye on them by following this process every month, before you know it the profitability & cash flow of your business will be negatively affected.
How do you take action to plug the money leaks?
You make an appointment with yourself every month to implement this simple strategy.
I guarantee that almost every month you will find that you will be able to save money leaking from your business. Even if it is just $100 it’s worth doing.
Subscriptions are probably one of the biggest expenses I see creeping into businesses that cost a lot of money over time. If you think $5 here, $10 there, even $20 is not much money. But when you times that by 12 months and then over a number of years, it really starts to add up.
To give you an example of how important plugging the money leaks is, I have a client that believes this one strategy has been the most impactful on his business in working with me over the past 12 months in my Profit 2 Cash program. He has literally saved himself $35,000 in expenses in the past 12 months. He now has more money in the bank, more stock available to grow his business, and even more expenses he is reviewing and eliminating over the coming year.
Plugging the Money leaks every month will have a profound impact on your business success.
Take the time to check on the little things in your business at least once a month and you will be surprised at what you can achieve.
Hi, I’m Phoebe. and I love business! As a sought-after qualified accountant, I come from a place of experience, with over 15 years of running my own accountancy firm, MGA Accountants, I scaled the business to double the size before successfully selling in 2015. Now I am focusing on what I love, helping Professional and Trade service business owners step up from being the Technician to the true CEO of their business, to create more profit and time freedom to live the life of their dreams.