Analyzing the Costs of Doing Business

Date

This article covers a little spring cleaning for your business specifically as it relates to your tech stack and your value ladder.

In my notes for this post, I actually titled this article, “Marie Kondo Your Biz”, but I’m not sure if I can legally call it that, but that’s basically what we’re going to be talking about here. Because like the magic art of tidying things up, you get a lot of pleasure over having things in their place, and that applies to every area of your business as well.

So this is specifically for those of you who have been in business for a little while, or who have gone through a big growth phase and you maybe still have things related to your old way of doing business, but you’re in a new way of doing it now.

Maybe you even feel like you’re doing your best by default at this point. This is all about how to Marie Kondo your business, clean up your tech and make it more efficient with that 30,000 foot view.

I talk about that 30,000 foot view as it relates to my Business GPS offer quite a bit. We’re not going to talk about my offer, specifically here, but I do want to reference what that is. So as you are in an airplane and you look down, if you have the window seat, right, if you look down and you see either a city grid, or even if you see like farmland area, it’s all laid out in a nice little grid, it looks so organized, and it looks so tidy. But if you were walking down at the street level, or the field level of that exact same spot, all you would see is what’s right in front of you.

That is why it’s so important to every once in a while, whether for you that’s quarterly, or you know, once or twice a year, you get to decide, right, but every once in a while, you need to step back and take a hard look at your business and see does this area play well with other areas? In my business? Does this tool allow me to do what I want it to do? Or is it actually hampering what I’m supposed to be doing with it?

That’s what we’re going to be talking about today. The 30,000-foot view helps you map out a marketing strategy, a content strategy and any launch plans for the next three to six months. Sometimes we buy in that growing phase of our business, but we continue paying for a tool even when we’re past that growth phase, and we don’t revisit it. The reason we don’t revisit it might be because we’ve well flat out forgotten, we might not know that there’s a better option. Or sometimes, it’s just too much of a bother to deal with while we’re in that heavy growth. But again, after things even out, you’ve got to go back and revisit it.

I would be doing this a huge disservice if I don’t reference the law of sunk costs. So economists call a sunk cost as something that has already been incurred and cannot be recovered. The very first time I heard this concept was about 10 years ago or so when I was still in my wedding photography business and I was working with a woman named Laura Meyer, who is also now in the online space, actually, but we were both photographers at the time. Back then, she was in the process of launching a studio build-out and she ended up going on to take that business to franchise and ran it pretty successfully I believe for a while, but she was doing a studio build-out and realized the space that she was in was no longer going to serve our business. It wasn’t big enough. I don’t remember all the details, but she basically walked away from that space and started a new build-out in a brand new space.

I remember I asked her if it hurt her to know that she spent so many thousands of dollars on this space that she wasn’t even going to use. She said, “Yeah, but that’s a sunk cost.” She had a business degree or an MBA, but that particular conversation did have a lot of impact on me because I’ve always been one of those people who says, “No, no, I paid for that. Now I have to use it,” and it feels like I’m wasting something when I don’t use something that I paid for.

But a sunk cost means you’ve already spent it, you’ve already lost the money, it cannot be recovered. And now if it’s not serving you, you need to just make a new decision. It’s not the same anymore.

Let’s look at that from a recent example from tech things that I’ve been dealing with because my business has gone through a fairly big growth phase over those last year and a lot of the tools I used a year ago, I’m still paying for even if I’m not using it but also there are some tools that I upgraded and sometimes it worked out and sometimes it did not.

I used to use a tool called Hotjar, it’s one of those tools that actually takes heat maps and screen viewings of people who visit your website so you can see where they fall off on the page. For a marketer or for a copywriter, for someone who designs sales pages, this is an incredibly valuable tool. If you are not getting the conversions that you expected to get on a sales page, it’s really important to look at where people are falling off. So, I don’t know, maybe six months ago, I found out that there was a tool called Plerdy, and it was available for a lifetime deal on AppSumo. So I bought it thinking maybe I wouldn’t have to keep paying $30 a month for Hotjar. So I switched over to Plerdy, trying to save some money, right? The thing is, I don’t get as much value out of the data coming from Plerdy, it’s harder to use. It’s just not as intuitive, for me at least. That is an example of one of those growth phase purchases that didn’t end up working out.

Alright, so how are we going to conduct your business? We’re going to look at three different things:

  • Recurring Costs
  • One Time Costs
  • Time Investments

The first is we’re going to look at the costs your business has on a recurring basis. Are they necessary? Are they duplicated? Are they still serving you?

An example of this is one of the things again from my tech stack, I paid for both Tailwind, which is an app for posting automatically to Pinterest. I also pay for Planoly, which is an app for posting automatically to Instagram but also has Pinterest capabilities.

You might ask why are you paying for both, Britney? I asked myself this all the time, to be honest. And the reason is they just work differently. Planoly isn’t as intuitive as Tailwind. It doesn’t have the same resources that Tailwind does, it only posts. But tailwind offers me some other benefits. It offers me tracking, it gives me the ability to see which pins are performing well. All of those things are not as easily available using Planoly. So I pay for those things separately, I’ve looked at this as a hard look with that 30,000 foot view and it makes sense to continue paying for both of them.

Another one is Otter.ai, I use Otter for transcripts and I specifically pay for Otter because when I pay for it, it integrates with my zZom account. This is really important for me, I do a lot of strategy calls with my current clients and I like to be able to reference what we said two weeks, three weeks later, sometimes when I’m actually implementing the work that we talked about and I’m not going to go back and watch the video recording. I know myself, I don’t like doing that, I would rather skim the transcript. So I now have all of my Zoom calls with clients automatically transcribed through Otter, I can only do that through the paid service.

I recently acquired a tool called Designrr and its primary use is aggregating blog posts into ebooks, creating transcripts for podcasts, show notes for podcasts, things like that. Because of that, I was like, “Well, if it does transcripts, do I still need Otter?” The reality is I still do because Designrr has a cap on how many minutes you can have transcribed, but also it doesn’t automatically integrate with Zoom. 

Alright, so that’s example number two. Example number three here is, I’m just right now as I’m recording this, switching from Phone.Com to using Zoom Phone for my services, and this doesn’t actually save me any money, but it is consolidating my services and keeping things all in one house. I am told by my husband who knows these things, because he sells phone systems for a living and such, that I’m not gonna save money with this. But people who use international calls or people who have current fluctuating phone bills, they would totally save money by switching to Zoom. For me, I’m already paying for Zoom, why not have everything in one house and just make it a little bit easier for me to use. I also don’t use the phone very much so for me this was kind of like a sure it’s a nice to have decision. I might not have gone through the turmoil of switching had I not realized that my husband can basically do it all for me.

The fourth example, and I’ve talked about this one in the past, is FG Funnels, it’s an all in one kind of marketing and CRM and project management tool for businesses like mine doing marketing online, it is $119 a month I believe. But in buying this platform, I was able to release Acuity, which I previously used for scheduling on my calendar; ActiveCampaign, which I previously used for email autoresponders and newsletters and such; and MemberVault which I previously used for housing, all of my courses and everything. Now, all of that is done in one tool FGF, and as a result, I’m actually saving quite a bit of money. But in addition to saving money, I’m keeping everything in one house and it doesn’t require all these extra integrations with various other tools. It’s all in one place and again plays well with the other tools, which is a huge bonus in any business that’s doing marketing online.

Alright, so those are my examples for your recurring basis costs. Now let’s look at upcoming investments, that would be a one time cost.

And you could actually look at more recent investments like this too, but specifically upcoming ones. Examples of this might be a new business contract for a new offer you’re going to launch, a new trademark for an offer you’re going to launch, a new program to help you implement a new strategy that you need to start doing in your business. Do you need freelance support for anything?

When people go through my Business GPS, I would say about 75% of them end up needing support of some kind, whether that is with a freelancer doing sales pages, doing Facebook ads, doing setup of tech tools, or whether that is a program learning how to implement a new strategy. Almost everyone needs this kind of support. Because guess what, we are not gods. We don’t know everything. And we do need help to learn the things that we don’t know.

Now, I do want to make one caveat here. And I just heard this from Maggie Patterson on her podcast with Dr. Michelle Mazur called Duped, which you should listen to, it’s fantastic. Maggie was also a recent guest on the Know, Like, and Trust Show  just a few episodes ago. But she said in one of their episodes recently that you should not make the mistake of using all of your budget on that freelancer or that program and leaving none for implementation because implementing costs money.

You just heard me talk about the costs of some of these tech tools that I’m using, $119 a month is nothing to sneeze at, especially when you’re in a starting or a growth phase of your business. The Tailwind and Planoly example, could you get by spending only $10 a month on just one of them instead of $20 a month on both of them? Absolutely. Those are the kinds of decisions that you need to make, especially when you’re implementing new strategies that are not yet proven in your business so when you are looking at upcoming investments, it’s not just oh, this new offer needs a contract, this new offer needs a trademark, it may have ongoing recurring investments to and if it’s something that’s a slow burn of a growth period, if it’s something that’s going to take six months for you to really pull a profit from, you need to make sure when you’re looking at this 30,000 foot view that you have not only set aside both money and time for the learning of that particular new strategy, or that new launch plan or whatever it is, but for implementing it to.

That brings us to the third part, which I just teased a little bit there. It’s not just the upcoming money investments you need to look at, it’s the upcoming time investments.

For somebody like me working 20 hours a week being very committed to that time schedule, because I do mom a lot, and I do go to the gym and workout, and I do like to cook healthy foods and meals for my family, right. For someone like me, the time investment is usually a bigger deal than the money investment. And I think a lot of people kind of skirt by this issue, shall we say, because it’s something that’s not tangible, necessarily in your life, it doesn’t have a hard number in a spreadsheet of a budget. But it should because time is a far more valuable resource than money ever will be.

Here’s the deal. When you are going to take a program, it requires money to buy, yes, but it’s also going to require a time investment. This is the main reason why every time I launched a program, every time I put out an offer in the FAQ, I always, always tell people how many hours they can expect to invest in this training, either per week, if it’s an ongoing thing, or total, if it’s a one time training program kind of deal. I am very, very careful to be accurate in that assessment, my Show up System 2.0, for example, the FAQ specifically says you can be up and started in less than an hour. There’s also a quickstart guide that gets you up and running in 10 minutes. If you already have experience with a project management tool, I do not want to give people a false sense that everybody can implement this very cool system and strategy in 10 minutes. That is not realistic. Nobody has a learning curve that fast. You can cut the learning curve if you’ve already done some of the work outside of the program, of course you can, but I don’t want everyone to think that that’s possible for them. I do want them to understand, it will only take you an hour to go through all of the training, you do not have to invest more time in that.

Another thing, I always make my training videos very short. For this reason. I don’t like doing live trainings because I tend to ramble. That’s why I have pretty extensive notes for all of my podcast episodes as well. I want to give you the meat and none of the fluff because I value time. That comes from my set of values and my lifestyle.

Again, if I work 20 hours a week, and approximately 12 of them are client facing. I only have eight hours a week to work on my business. So if I’m going to take a program and it’s going to take five hours a week, I need to know that right up front.

Now I did invest in a program called Measure and Maximize run by Jennifer Grayeb a few months ago, I invested in it knowing it was going to be a huge time investment knowing it was gonna take me longer to get through than the average program I’m willing to invest in. But I really want to be able to create really specific nitty gritty, geek oriented marketing dashboards for my clients. It’s a service I really do want to offer. So I decided to prioritize that even though she says right there on her FAQ on her sales page that it will require a few hours a week to implement. I did that knowingly but I did that with full disclosure and that is really the key to me.

When I am looking at upcoming investments whether it’s a one time program, hiring somebody like a VA or a podcast manager that’s going to require some time investment on my part, I want to know the time investment upfront, because I do have a very strict schedule in terms of work hours, I have to know all of that upfront.

That right there kind of concludes why I am such a fan of spring cleaning for your business. Kondo-ing your business gives you information, it gives you data so you can make better decisions for the future. If you know what your recurring costs are, and you know that they’re going to stay approximately the same for the next six months, you don’t have to worry about including that data and your decision making because it’s not going to change. But if you’re looking at your costs, and see that you’re paying $600 a month in subscriptions and wonder if there is a way for you to shed $100 or $200 off of that, which would give you the ability to invest that $100 or $200 in more VA support so you can do other things, those are the kinds of decisions you can make once you have looked at your business from that 30,000 foot view.

Really, that’s what it comes down to right, we all need the information so we can make better decisions, we can then take that information, we can filter it through our values, which is why I’m such a huge fan of knowing what your core values are, of course, but we can filter it through our values, so we are making the right decision for our business so we can grow the way we expect and hit whatever goals we have set out for the next three, six, or twelve months.

Alright guys, I hope that was helpful to you. If you have any information, any topics, any ideas you’d really like to cover in the future, feel free to reach out. I am actually in the process of planning the summer content schedule for the podcasts. I’d love to hear your feedback.


So many of my clients come to me in frustration. They know something isn’t working, but can’t pinpoint what’s preventing their desired growth. That’s where Business GPS comes in, learn more by clicking the link and schedule your free call today.

More
articles

This website uses cookies to ensure you get the best experience on our website.