Hello everyone, and welcome to a new year filled with opportunities and possibilities. As we embark on the journey that is 2024, it’s essential to take a moment to reflect on our financial health, particularly when it comes to expenses. In this blog post, I want to emphasize the significance of reviewing your expenses and share some practical tips on how to identify areas where you can make a positive impact on your bottom line.
The Profit Equation:
We often talk about setting goals, maximizing revenue, and calculating profits, but it’s crucial to recognize that the driver of profit is, in fact, our expenses. While fixed costs like wages and rent may not be easily adjustable, there are numerous smaller expenses that, when left unchecked, can accumulate and significantly affect your overall profitability.
Taking Inventory:
As we find ourselves 10 days into the new year, now is the perfect time to conduct a comprehensive inventory of your expenses. Soon, you’ll be receiving your financial statements from your accountant or financial team. Take the opportunity to delve into your profit and loss statement, scrutinizing each section for potential areas of improvement.
Subscription Scrutiny:
One area deserving of careful examination is subscriptions. Ask yourself: What is this $100-a-month subscription for? Is it still necessary? Are we actively utilizing the services, or is it a lingering commitment from years past? This is an excellent time to identify and eliminate subscriptions that no longer contribute to your business’s success.
Renegotiating Expenses:
Beyond scrutinizing existing expenses, consider opportunities for renegotiation. Health insurance, for instance, is a significant expense, especially if you provide coverage for your employees. As renewal dates approach, seek new quotes and explore options that may offer comparable coverage at a lower cost. The same principle applies to other insurances like malpractice and business insurance-shopping around can yield substantial savings.
Seizing Opportunities:
Trimming unnecessary expenses isn’t just about cutting costs; it’s about creating opportunities for growth. By reallocating funds saved from scrutinizing and renegotiating, you can invest in marketing initiatives, hire new talent, or further develop your business in areas that will contribute to long-term success.
As we dive into the new year, let’s not overlook the importance of keeping our financial house in order. Taking the time to review and trim expenses may seem tedious, but the benefits are undeniable. Small changes in expenses can lead to significant improvements in your day-to-day operations and overall profitability.
If you have any questions or need guidance on navigating your financial statements, don’t hesitate to reach out. Here’s to a prosperous and financially savvy year ahead. Have a great day!
Written By Leah N. Miller, MBA
My name is Leah N. Miller, MBA, founder and CEO of Firmly Profits. Starting as a paralegal, I worked my way up to become a firm administrator and CFO of a personal injury law firm in Fort Myers, Florida.
