Yesterday I got the boot. Being the business owner, I didn’t fire myself, but one of my clients did. With assurances I had done a great job, they were looking at their budget and wanting to cut back on outsourced projects. Wished me well, yada yada. I did appreciate his kindness and professionalism. What bugged me was that clearly the cost of the service drove the decision, rather than the value of what I provided. 

If you own a business and are responsible for bringing in the money, chances are that you’ll experience the loss of a customer or two. Or twelve, depending on how many years your business lives. Having owned a business since 2004, it’s not the first time I had gotten the boot and sadly it won’t be the last. 

The biggest question is – what’s next? What action do you take? 

With a cut in my monthly pay, I have to examine two basic things: how to decrease expenses; and how to increase revenue. Next time, I’ll address revenue. 

Let’s talk expenses first. 

There are certain monthly bills you don’t have the luxury to stop – I need my electricity, computer, internet, heat, food and car. There are other expenses we can consider cutting or negotiating a lower fee or deferring. So pull up your bank and credit card statements for the last 3 months and see what’s going on there. 

Cut Unnecessary Expenses. Eating restaurant and “prepared” foods will need to take a back seat to home-cooked meals. Like actual cooking, not buying a frozen meal to be microwaved. Those are all more expensive than making it yourself. And buying your coffee out is really a sin if you have a perfectly good Keurig on your kitchen counter.  

It’s probably best if I remove the Amazon icon from my phone, as it makes it way too easy to buy spur of the moment items. And while I don’t use Instacart often, I will have to use it less often and get my butt to the supermarket myself. 

Defer Expenses.  

  1. If you’ve been using your debit card on expenses that you don’t want to cut altogether, then consider moving them to a credit card. You’ll still pay, but now you have some time. It’s important to go into credit card use with a plan – as soon as an extra check comes in, you walk it straight into the credit card company and make a payment toward your card instead of depositing it in your checking account, where it can become diluted. It’s ok to rely temporarily on your credit card as long as you’re committed to paying it back into your account with each new project.
     
  2. For subscription services, there’s usually an option to put a pause on recurrences or schedule them further apart. My Stitch Fix will have to be pushed to quarterly instead of every other month. ::sniff:: 

Negotiate A Lower Fee. Often a monthly fee can be “lowered” by paying for the service on an annual basis. In fact, I’ll bet you have plenty of those opportunities within reach. Paying annually lowers the overall cost, and those savings add up. Take a look at all your monthly costs and approach each one by investigating how it can be lowered. Call the companies and ask! Last year I lowered my cable and my mobile bills simply by asking for options, and I haven’t seen a reason to go back to the higher choice.  

Are there networking events you attend which have a higher fee as a visitor? Weigh the value you get from being around these folks to the cost of paying for a membership and reducing the monthly event fees. If the group brings you value in referrals, education, etc, then make the jump into membership and lower the monthly costs of visiting. 

Your Overall Mindset. Make this a positive venture. Once you start this hunt for lowering your expenses you might find it’s like a scavenger hunt and you’ll be intrigued to figure out how to do more of it. It has to fit your lifestyle, though. I’m not a coupon cutter and will continue that way. Be bold and ask questions of the companies you’re paying. 

Once you’ve lowered your overall monthly expenses and you do get a couple of new clients to put you back on track, you’ll likely discover that some of your strategies are solid enough to remain for the long term. Although I will see how long I survive without the Amazon icon on my phone….. 

Do you have a cost-reducing strategy you’ve employed successfully? I’d love to hear about it! In fact, I’ll be collecting some of the best tips I receive and will publish them separately. We’re all in this together!