Building a thriving business is a two-part equation – your sales need to grow while your expenses stay low. Sales growth stirs an entrepreneur’s imagination with creative solutions and attractive charts, but while you’re distracted with the revenue end of the equation, your expenses can easily spin out of control. If your expenses are eating up too much of your profits, here are some checkpoints to consider. 

Pinch Those Pennies

Most businesses have recurring micro-expenses that are completely unnecessary. Pull out your bank statement from last month and take a look at what you spent. Watch for trial memberships that have expired, upgrades you’re no longer using, redundant services, or large bills that could be trimmed just slightly. Can you find ten ways to trim $100 from your monthly budget right now for a $12,000 annual savings? If your company is very tiny, look for ten ways to trim $10.

Talk to Vendors

Next, survey the largest bills you pay every month. Can they be trimmed with a little creativity? Call your vendors and ask them for their best ideas to trim 10 percent from your expense. If you haven’t shopped for pricing on your largest expenses in a while, request bids from your current vendor and two or three competitors to make sure you’re getting the best pricing available.

Dig into Your Books

Bookkeeping is one of the least glamorous aspects of running a business, but you can’t make good decisions without solid data. At a minimum, you should be reviewing your profit and loss statement each quarter against the same quarter of the previous year. Which expense categories are growing fastest? Why? Is that expense growth reasonable and necessary?

Know Which Sales Not to Make

Your books should also tell you exactly which areas of your business are the most profitable and where your break-even point is. Some sales generate so much expense that they actually drag your bottom line downward. If you have products, services, or customers that aren’t bringing in solid profits, either trim them from your repertoire or increase the price

Monitor Morale

Apathetic employees and high turnover are a huge financial drain. If you’re not consciously working to keep your staff happy, their productivity is almost certainly slipping — and if you haven’t started having issues with turnover, you will soon. Your employees should feel included in the company’s mission, and they should feel recognized and rewarded for their contributions. This is so important to your bottom line that large businesses have whole departments devoted to building employee morale.

Prune Your Staff

Have you been hanging on to unproductive workers due to loyalty or misplaced hope? Keeping those underperformers around can demoralize your other staff: Why work hard when the woman at the next desk gets the same paycheck for doing nothing? Holding on to weak employees also prevents you from bringing in new, energetic people who could be contributing dynamically to your bottom line and your corporate culture.

Watch Your Payroll Growth

Hiring more staff isn’t always the best way to support increased sales. Your systems are probably becoming overly complicated or redundant as you grow; stepping back as a team and looking at processes with a fresh eye might help your current staff get more work done. Outsourcing or combining functions might help you postpone hiring more staff as well.

Guard Your Time

Your job as a leader is to drive your company forward and keep your team moving toward its goals. Which of your regular tasks are related to that job? Focus on those, and find ways to delegate, outsource, or eliminate the rest of your work. 

Controlling expenses isn’t as exciting as generating sales, but tightening up that slack in your budget can give you an instant profit boost. To keep that energy going forward, add a quarterly expense review to your schedule so that rising costs won’t cut into your bottom line. 

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