This moment of realisation came when I was doing business planning for 2021. There were changes I wanted to make to my business model and structure, and I was mindful of some upcoming expenses. Being a primarily online provider of services (i.e. I don't have a building or office space that I rent), the main expenses to run my business are software-based (i.e. website hosting, Microsoft suite, social media scheduling software etc). So I thought, it's a good time to check how much money I'm spending on these online programs to see whether there was scope to save some money or afford some new tools for 2021.
I started by writing about a list in dot-points, but it just wasn't working.
I don't know about you, but I'm quite a visual person - I find it much easier to digest information when it is laid out clearly (and preferably with some colour coding!)
So I migrated from my Notes app to an Excel spreadsheet, and I applied some formulas which helped me calculate exactly how much I was spending per year.
The number shocked me.
I knew I was spending a couple thousand a year on software subscriptions ... but it was several thousand dollars higher than I had realised.
I think ultimately, it came down to poor processes on my part... a common mistake I see many small business owners fall into.
Often, we are rushed and juggling any number of projects at one time, often racing to the finish line to check those projects off.
A common block we run into is not having the right software for the job. For example, knowing you need to set-up an email sequences for prospective customers but not having the right email program. The next thing you know, you're on Google searching and finding a program like MailChimp and subscribing to their entry-level subscription so that you can tick that project off.
For me, I'm so focused on getting that task done that I don't stop and open up my budgeting documents and take note of this new expense, I simply squirrel it away in my brain and promptly forget about it. Multiply that out by 10 or 20 subscriptions and you're talking some serious money that you've lost track of.
I've spoken about this previously when discussing the 3 Technology Mistakes I Made in My Business ... basically falling for the upsell is when you're in the middle of doing something with a program and suddenly you're told that in order to proceed with what you want to do, you need to upgrade to the next subscription level! You're already so far in and focused that in the moment the easiest and best solution appears to be to upgrade.
While this might solve the initial problem (i.e. you have access to the feature you need to get that task done), it can quickly add up to you paying a lot more per month than you were initially planning for. This definitely happened to me in the case of a couple programs.
Something that was genuinely useful for your business three years ago won't necessarily be as useful to you now. Businesses change, grow, evolve ... and software doesn't always then align with these changes.
Also never forget that three years is a long time in the world of technology and software startups! What might have been ground-breaking, game-changing, well-priced software three years won't necessarily be the best solution on the market today.
That's why regularly reviewing your subscriptions is so important, to check they still align with your business objectives, have the features you want and that you're still getting value for money.
By seeing all my subscriptions listed side-by-side it was clear there were some that were no longer being used to their full potential.
I worked through the list, asking myself the following questions:
As a result of this, I was able to cancel or downgrade a number of subscriptions and end up with a ...
... total annual saving of $4,082!!!!
Completing an audit like this for your own business doesn't have to be scary, or complicated. But there are some key components and steps you just need to consider
You can use any program/system to complete your audit - even scribbling it out on a piece of paper will do! I used Microsoft Excel and found it a great and easy tool. I've now made this template available for others to download and use as well... If you'd like to get your hands on a copy you can do so here.