Creating a profitable business is a delicate balance of making the right investments, sales and reducing business expenses. It’s a balance that takes time to figure out and requires a lot of patience on the part of the business owner.
I personally don’t think there’s a right formula so long as you are making a profit. I also believe there will be a time where you’re spending more than usual in order to get to the next level. However, you can’t let business expenses take over.
If you know you need to reduce business expenses in 2018, here are some places you can start.
Your Marketing Budget
I’ve been known to spend quite a bit of money on marketing – and it’s with good reason. If no one knows you’re out there then you can’t make money.
However, not all marketing expenses make sense for every business. That’s why it’s important that business owners regularly review what’s working and what’s not.
I personally do this through my email marketing service. My service allows me to use different tags for different groups of people. Each tag is associated with how that individual found their way onto my email list – text to opt-in, Facebook ad or a freebie. I then track the numbers each month to see what’s working on what’s not.
For example, let’s say that three months from now I see that text-to opt-in isn’t really working out for list building. If that’s the case then I’ll stop spending money on it.
Subscriptions and Fees
Another area where you can reduce business expenses is with subscriptions. After all, how many subscriptions do you have that you aren’t actually using? Here are some places to start:
- Online image editors
- Magazines or industry publications
- Social media schedulers
- Landing pages
These aren’t fast and hard rules, they are just suggestions. As I previously mentioned, each business is different so make sure to look at your own business expenses to see if they are in alignment with your goals.
You’ll also want to look at ways to reduce fees for services you use regularly. For example, make sure to shop around when it comes to payment processing fees because they can sneak up on you.
Sometimes reducing business expenses is a matter of getting rid of duplicate services. For example, I was using a service to help automate my Twitter account and grow my following. Well, it turns out that my PR people already handle that for me, so I can cancel the automated service.
In addition to getting rid of duplicate services, you can also reduce business expenses by downgrading services.
Here’s what I mean by that. Many services – like for example, landing pages – offer different packages with different features. Maybe you’ve been paying for the most expensive package because you thought you would need all the features, but you have since come to realize you really don’t need all of that. If that’s the case, then you can downgrade and save yourself some money.
Paying Annually Instead of Monthly
The last way to reduce business expenses is to pay for services annually instead of monthly. Usually, they’ll give you a couple of months free if you do this. They may even grandfather you in to original pricing when their services inevitably get more expensive.
This method of reducing business expenses may look like you’re spending more money – but only at first.
After many years of spending money on my business, 2018 will be the year I pay more attention to reducing my business expenses. In doing so, my profits will likely increase.