I'm spending HOW much on utilities?! And what the hell is THAT expense for?..."
That was me, screaming at my P&L statement a few years ago. I had finally hired a bookkeeper and was (geekily) excited to start interrogating the numbers that underpinned my business. I have always loved math and numbers and order and neatness, and squealed with delight when I got the first P&L statement in my inbox.... until I was slapped in the face by reality.
It seemed that some costs were far greater than I had realized and far greater than I wanted them to be. From utilities to small admin fees for various products and subscriptions, my tight little ship suddenly seemed to have dozens of little holes of various sizes that were all pouring out sweet, sweet cash. It wasn't exactly the Titanic, but my stomach definitely sank when I saw how much cash was going in the wrong direction...
Now as business owners and founders, we all know that it takes money to make money. There's no escaping that. But there is a difference between spending money (throwing it away or at something new for new-ness's sake) and investing it (improving or protecting what you already have). The trouble is far too many founders do the former instead of the latter.
When was the last time you sat down with your P&Ls and looked at where your money was being spent or invested? When was the last time you looked carefully at all of the big and small costs and worked hard to eliminate the unnecessary or negotiate the price of the essential? When was the last time you reviewed your prices? Or chased up missed payments? Or went to the bank to cash that check sitting on your desk? Or simply decided NOT to throw money at a problem and think about a better solution instead?
I get it. There is so much to do and there are so many pulls on our time and attention and energy, but if we're not careful, we can start to take our business for granted and neglect the important things. As in all relationships, our relationship with our business and our money and our customers needs to be nurtured and attended to ALL THE TIME or it will suffer. Protecting what we already have means closing the door on Neglect's smug little face.
Neglect wants you to think it's okay not to review your financial statements because that's what your accountant or bookkeeper is paid to do. Neglect wants you to think new customers are sexy and seductive unlike your boring old customers at home. Neglect whispers oh so sweetly in your ear about expansion and growth and new-ness that your body tingles at the thought... But what Neglect fails to confide while slowly courting your business brain is how potentially deflating and expensive and fruitless all of his advice could be! (Who put Neglect on your Board of Advisors anyway?)
When I sat down and regularly started reviewing my costs and P&Ls, my profit almost literally exploded. Because I am committed to keeping existing clients and Members happy, they are great brand ambassadors. And because I treat my suppliers and partners like equals, I get priority service in return.
All of these things took time and effort, sure, but it is time and effort invested, not spent, in protecting what I have. I front-loaded the hard work of building a business, getting customers, establishing great service, finding reliable suppliers, and building relationships and consistently told Neglect to hit the road.
So the next time you find yourself itching to run a new marketing campaign to get more customers, or reaching for the phone to buy a new asset because the old one just won't do, or strategizing how to do more, more, more in your business, stop yourself and consider whether you could do more with what you already have instead (make more profit from the income you already have, offer more to the customers you already have...) and whether your business wouldn't be better off if you did.
Less sometimes really is more. Protecting what you already have is often the best and smartest thing to do.
As the Patel-family version of the classic saying goes: "A penny saved is two pennies earned." So think carefully about all of the ways you can save and protect your pennies and all of the other hard and soft assets you already have.