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Is Your Business “Leaking”?
Last Friday, I only had a few computers on the bench (which didn’t take long to repair) resulting in me having much of the afternoon free. I took this time “seal some business leaks”.
I like to think of my businesses finances as a Styrofoam cup with holes in the bottom. I pour water into the top of the cup (which represents my income) and some of it leaks out of the holes in the bottom (which represent my expenses). If the cup is filling up faster than it is leaking then I am making a profit.
The cup is always leaking because I have the ongoing expenses of running a business like utilities, fuel and web hosting. It is the web hosting leak I wish to talk about in this article.
Many years ago I used to do a lot of web development work for my clients. I would create the site, purchase the domain and host it all for them. The clients loved this setup because it meant they didn’t have to worry about anything technical. As a result of this I ended up hosting quite a few clients on my Hostgator reseller account.
I started out originally with the lowest end package for $24.95 per month but I eventually had to upgrade to the middle level package at $49.95 per month to deal with all of the clients. This setup worked great for many years but once I stopped doing web development work it meant I wasn’t adding any new hosting clients, yet I was slowly losing them as the years went on.
Fast forward to last Friday: I found I had way more bandwidth and space available than what I needed to support my remaining clients so I dropped the hosting package back to the low end $24.95 package.
Basically, my business was “leaking” $25 USD per month and while that doesn’t sound like much, especially when I will probably make $100-$200 from the machines on the bench at the time; that $25 works out to be $300 per year. If I leave it for another year, that leak will have cost me $600, then $1200 for the next year and so on. It really can add up.
Business leaks aren’t always just financial ones either, they can also be in the form of you losing clients because of something stupid, like not updating your answering machine message.
Think about it right now and see if you have any business leaks of your own. Chances are you will be able to find something.
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Is there a way to comunicate with Bryce , i need some advice and i think he will be the best to get it from.Thank you in advance.
The forums are your best port of call for any advice.
Bryce does post on the forums but many are willing to give advice.
Leaking: when one appointment is lost in a mountain of paperwork.
Leaking: money lost because customer owes money and they keep forgetting to pay and sometimes I forget it too (again mountains of paperwork).
Leaking: when I do not follow up my customers.
I think that perhaps I need a secretary.
Leaking: Everytime you make a purchase for parts for your customer on-the-fly, write on the receipt at the retailer who they are for. You cannot believe how many times you will miss adding that part to a customers invoice. I always have one place in my vehicle for receipts (not my pocket).
I think I pay 5.99 month for hosting.
It is a very effective trick to multiply seemingly insignificant amounts wasted every month by twelve to get to the annual amount wasted. This practice really puts things into perspective, and makes one realize how quickly the small amounts add up to a significant amount over months and years.
I think you meant $900 the third year, not $1200, unless they start doubling your bill every year! ;)
I think it is a great idea to reanalyze your costs every so often to make sure you are using your money as best as possible. Another helpful thing is to get someone outside of your business to take an outsiders view to see if they notice anything that causes them worries. This would go along with Bryce’s idea of not losing business to do a bad answering machine message.