Naughty Child - Profit Triangle - Part 3


So far we've done Profit the top of the triangle, we've done sales, one of the building blocks

below profit we have done cost of goods is the next building block below the top of the profit triangle.


Now we are going to talk about fixed expenses.


Fixed Expenses can be a rather cheeky little thing, can be a bit like the naughty child in the triangle and sometimes get a little bit out of control and we are too busy to do something about them, and they learn that it's ok to keep being naughty.


So here are some of the sneaky little expenses that happen in your fixed expenses on part 3 of the profit triangle.


Subscriptions. You sign up for that the new subscription. That's maybe $15-$20 a month and before you know it you've got four or five of those happening and climbing up to around a hundred bucks a month or $1k a year pretty quickly and easily.


Maybe you got team members who have been able to purchase things without authorisation

from you so you need to be making sure you're keeping control of that.


Maybe you've got crazy amounts of stationery.


Maybe you haven't been back and renegotiated with the landlord in a while.


One of the goals in my book Find Your Cash is how can you reduce the fixed expenses by at least 5% when you reduce the fixed expensive by 5% it means you need a bunch less

sales to maintain the same profit.


So do an audit on your fixed expenses.


In fact here is a challenge.


How do you take minimum 5%, hopefully 10% off a lot of the line items in your fixed expenses?


So print out a P&L of the last 12 months go through and have a look at it. Where

you can be nabbing the naughty child in the process has maybe gone a bit crazy and is running away with the profits because that is essentially what's happening there.



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