You started a business because you wanted independence and control over your lifestyle.
You want freedom. But what you have is overwhelming debt. There is zero profit and little to show for your insane amount of effort.
Here are 3 practical steps to get you started on reducing expenses.
1. Print your statements
Everything.
- Your last 12 months income and bank statements
- Accounts payable reports
- Credit card statements
Now you can start to mark them up.
2. Categorize your expenses
There are only 3 buckets.
- Expenses that directly generate profit
- Expenses that are necessary, but you will look for alternatives
- Expenses that are unnecessary
Every expense will fit within 1 of these 3 buckets.
3. Identify your recurring expenses
These ones are crafty.
- It will happen again next year, or more frequently
- Indication of future spend
- Rent, subscriptions, internet access, training, magazines…
Become aware of every payment you make.
Now you’re ready to get to work.
Start cancelling the unnecessary category. Then look at replacements for the necessary. Finally, dig into profit generating expenses, find efficiencies that will be favorable to your bottom line.
As your expenses drop, so will your stress.