Losing Money Online — How To Prevent Wasting Money in Business | TBS #109

Each one of them just cost $10-$97 a month and I could justify them all in my mind. I’d tell myself: “I will surely make back that investment somehow, and it will pay for itself later on…”

Before I knew what was going on things were adding up to $500, $1,000 and even $1,500 overhead costs for my business.

Then I had to do a reality check.

I broke down my expenses into three categories:

1) Absolute requirement

2) Not a requirement but making me money

3) Not a requirement and not making me money

Most of my expenses were in the “not a requirement and not making me money” category, so I could easily cut them without harming my business. So I could reduce overhead costs and maintain the same level of revenue I was generating at the time with no problem.

Then I closely looked at which tools I needed.

For example: Hosting, Domains, ClickFunnels, MailChimp, Skype credit, insurances, my tax man, accounting software etc.

These are things I need to run my online business, they are a necessity. Some of them I need for myself and some of them I need because my marketing agency clients depend on it

Then there are things I don’t need but are making me money.

For example: Cold emailing software, Shopify, Facebook ads, buying leads, marketing training, online courses, education

All of these things aren’t an absolute necessity, however, they are investments rather than expenses. These things don’t cost me money, they make me money. So the more I can invest in these things while getting a return on investment, the better. Just make sure you know how to work with this tools: Facebook ads are one of the most common ways that people blow up money online.

And finally, there’s the third category of things that I aren’t required to run my business, nor making me money in a measurable way.

For example: LeadPages, Infusionsoft, HootSuite, Wistia, SamCart.

These can all be replaced or cut because they aren’t making me any direct money. They are fancy widgets with incredible features, but I can’t measure that they’re making me more money.