Cost-cutting quick wins
What’s the first step to cutting costs?
Identifying Quick Wins.
Why?
Let me be real with you:
Cutting costs can be tough.
You might have to make some challenging decisions.
You may have to do things you don’t want to do.
It is easy to fall into the trap of hitting a wall, losing momentum, and putting it off
Until it’s too late.
That’s why we start with quick wins!
Quick wins are cuts that feel GOOD to execute.
They’re easy cuts with no downsides.
In other words, little dopamine hits that get you excited about cost-cutting, so you have energy for the tough stuff.
Here’s how to start:
Open up your accounting software (Quickbooks, Xero, Wave, whatever you got)
Run a Profit & Loss statement (aka. Income Statement - they’re the same thing) with a period of the last 12 months
You’ll see a list of your expenses by category for the previous year. In all major accounting programs, the total expense amounts should be a link. If you click the link, it’ll show you all the underlying transactions that comprise those totals.
Now it’s time to dig through and find savings! Click each Total link, starting with the largest number (Hint! If you have a Subscription, Dues, or Software line item, those tend to be the cost-savings goldmines!).
Once you’re viewing a list of underlying transactions, group them by Vendor (this will help your brain make sense of the transactions because it puts them into context)
Go vendor by vendor and review the totals you paid and the underlying transactions. Are there vendors you don’t recognize? Transactions that don’t match what you’re supposed to be paying them? OR maybe the expenses are as expected, but the total amounts make you realize you’re simply paying too much for the value you’re getting? Make a note of the vendor, expense amount, and action you want to take (cancel, downgrade, negotiate, etc) for any expenses that qualify.
Once you’ve reviewed the entire P&L (or enough of it to feel like you’ve found everything you’re going to find), pass the list to your admin team to execute. Or pour yourself a cup of coffee and get to work!
Some other quick wins to execute now if you have the energy:
Maybe you have non-essential low-performers on your team who you’ve been putting off letting go because it feels uncomfortable. Now is the time.
Does your company use a certain software you just hate? Take 10 minutes and search around for some alternatives. You may find a replacement that’s lower in cost and suits your needs even better.
Try it, and let me know how much you find in savings!
Need help? Feel free to ping me with questions.
Tune in tomorrow for the next step: Checking in with Goals & Values!
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