One of the first things I do in the New Year as an entrepreneur is filter through my finances to see exactly where my company is spending money. It gives me the opportunity to take a deep dive into what is coming in versus what is going out and the return if any, I am receiving from my investments.
Not all returns of course are financial, some are about saving time and creating freedom through efficiency and increased productivity. Yet, even in the non financial returns I want to see how it all leads to an increase in my bottom line, because that my friend is why I am in business.
Profit matters, I’m sure we’ve all heard the quote about having an expensive hobby…
“If you’re not making money in your business, you don’t have a business, you have an expensive hobby.”
One of the challenges I find as a I venture through my finances is all of the “NEW and NOW” purchases I’ve made. You know the new software, app, or piece of equipment that you MUST have in order to run your business the “RIGHT” way. All those promises that lead to impulse purchases that typically equate to very little in the long run.
We’ve all been there, searching, seeking for a silver bullet that will make running a successful business simple and smooth with the click, push, or tap of a button.
The truth is, it’s never that easy, but just like those late night infomercials that sell you the latest health programs, I’ve fallen for them time and time again.
Not so last year, I finally got a handle on doing away with making impulse business buys that suck up my profit and produce little results, “EVEN IF ITS JUST…$10.00 PER MONTH, I am began running every purchase through a filter to ensure that it fits my company needs and my desired goals and outcomes.
Understanding your company’s financial picture even on the smallest scale is important and vital to growth. When you know where you are going, you can prepare for the increase.
The fundamental differences between successful companies and unsuccessful companies are found in the red and black. Contrary to popular belief, size has very little to do with achievement. There are plenty of large companies that make exorbitant amounts of money but excessively overspend on products, applications, and employees that aggressively devour their bottom line and cost them millions per year. Oftentimes its not until the company has hit rock bottom or fallen into deep debt that they begin to meticulously analyze their spending habits, by then however, it’s too late.
I encourage you to take some time this year and analyze how you are spending money as a company. Where you see little to no returns its time to make some adjustments. Don’t be afraid to cut some things out completely if they are not working. Pull on your relationships as well, contact vendors and suppliers and see what if any loyalty programs or concessions they will make for long term customers.
Take back your profit, and use it for good. Direct your finances towards the most profitable portions of your company, reinvest in areas that are consistently fruitful and lucrative and build upon those opportunities to grow and scale.
Want to use the filter I run all my purchases through? Download this free worksheet and answer the questions to aid in avoiding overspending in your business and take back your profit.
Click the link HERE to download.