When you’re in the early stages of your business, there’s so much to do to get ahead – and the thing that arguably matters most is the thing that often gets neglected.
Your bottom line.
For a long long time, when we were growing our tour business, we (like most) were so focussed on all those other super important things like:
- getting more customers
- improving our tours
- growing our team
- finding the right travel partners
- Getting more traffic
- Creating great systems
We were just ‘too busy’ to review our expenses.
It was always on ‘the list’ but I kind of had this idea in my head that it would take a lot of time to do this properly and thus it was forever getting bumped down the list below something seemingly more important
It was at around the 4 or 5 year mark that we decided enough was enough. Business was going great. We were growing, improving, innovating, building a great reputation, more of the right travel partners wanted to work with us. Everything seemed to be falling into place.
Except…where was the money?
It always seemed to be going out the door faster than it was coming in. We always seemed to be scrambling and it was starting to wear us down.
So we took action.
We put a simple strategy in place that completely changed the look of our bottom line. We had for so long been focused on income and growth that we had neglected our expenses.
We therefore initiated what we called our ‘plug the leaks’ campaign.
We were so blown away by how successful this campaign was when we rolled it out the first time that we decided right then that it was something we had to do every 6 months in our business without fail.
So what was it?
Well, it involved everyone in our business taking a microscope to every single expense that ran through the business that was attributed to their role – both the cost of sale and our business operating costs.
I mean everything: bank fees, insurances, utilities, mobile phones, SEO, IT support, vehicle repayments, maintenance, rent, uniforms, accounting and bookkeeping, printing, stationary..absolutely .everything.
Then we focussed in on our suppliers. Were we using the right ones? Were there better options? If we were using the best then were we getting the best possible deals? Could we go back and ask them to review their prices based on the business we were generating for them?
So the process involved every team member time blocking a couple of hours per week for a month to focus exclusively on this campaign.
At the end of the month we scheduled a 2 hour meeting and everyone presented their results.
When we did this for the first time, our business at that time was doing $1.1 million in revenue.
That first ‘plug the leaks’ campaign resulted in an overall annual saving in business expenses of…$26,000.
$26,000! I was stunned by the result.
What could you do with $26,000?
How much healthier would your business be with an extra $26,000 on the bottom line?
I thought to myself: Why have we been working so hard and leaving so much on the table simply because we’ve been ‘too busy’ to care about our bottom line?
It just didn’t make sense and I was just relieved that we had made the move to take action now.
So my tip to all tour and activity business owners out there that are driving forward to get get more customers, drive more traffic to their website, growing, scaling and improving their business – don’t neglect your expenses. A little bit of attention can make a massive difference to your bottom line.