The Strategic Analysis Tool Helping Women in Consulting Increase Profits – Even While The Coronavirus Crisis Continues To Unfold
This was originally posted on my Seven Figure Consultant LinkedIn Newsletter. Subscribe today to get insights about how women are building powerful and impactful consulting businesses.
Do you know which expenses are essential for your consulting business to thrive? And which could you stop spending out on?
There is a difference between ‘disposable spending’ in your business and ‘investment spending’.
And when business owners don’t understand this, it causes all kinds of problems.
Over the last couple of weeks some businesses were panicking and making sweeping cuts. Laying off all their staff. Cancelling all their contracts. It wasn’t considered or strategic, it was just a panic response.
When in reality, what was needed was calm consideration of expenses, and identification of which were essential, and which were not.
But you don’t have to wait for a global pandemic to do this exercise.
I want to encourage you to review your business spending on a regular basis, definitely monthly, and categorise your spending as ‘disposable spending’ or ‘investment spending’.
Before I viewed my spending in this way, I saw all spending as ‘reinvesting’ back into my business. I had just gone up a level in my business and financially I was pretty happy with where things were.
But after taking a more strategic view of my spending and tracking it against the return on investment it was actually bringing, I realised there were things I was testing at the time that just weren’t worth the investment.
So I chose to simplify and streamline what I was doing in the business, to bring my operating expenses down and drive more profit that way.
And here’s the thing. When I’ve carried this out with my clients, they have in every case I think been in a similar position, and together we’ve been able to substantially reduce their running costs without cutting expenditure they actually NEED to be growing their business.
In Episode 020 of the Seven Figure Consultant Podcast I explored:
- What those two terms mean
- How to streamline your expenses for maximum profits (I increased my profit margin by 1500%)
- And how to use this principle to make sure YOU aren’t the expense your client cuts.
If your income is uncertain at the moment, or if you are having to downscale some of your contracts, spend some time this week listening to the podcast, then reviewing your spending in this way.
It’s a good thing to be doing right now if your business needs help to survive. And it’s a great thing to be doing on a regular basis as part of your management accounting process.
But before you do that, tell me – when was the last time you reviewed your business expenses?
Free Report – The Six Elements of a Seven Figure Business
I’ve created a free PDF report called The Six Elements of a Seven Figure Business. It’s my most popular free resource and in it I outline the 6 areas of unscaled businesses that need to change in order to move past being ‘booked up and burned out’ and shifting into that higher gear that gets you cruising again.
It’s the framework that helps consultant women like you find their feet and get back to leading the business, rather than being buried in client work and back-end business operations.
Thanks for reading! I’d love to hear your feedback and future topics you’d like me to feature.