"Build" Guide - how to Build your Private Label Business
This is the 4th of 5 episodes in the mini series with One aim: Increase Your Profit!
Today we address the less sexy side of increasing profits: decreasing costs! All of us are to some degree aware of costs when ordering inventory because a sudden spend of several $1000 in one go generally gets your attention!
But there is a hidden profit killer that I’ve fallen victim to too many times: OVERHEADS!
Your overheads creep up over time, it seems, like weeds! Add the latest software product once a month, use a VA for research, add a bank account… and it can add up over the months to several hundred pounds a month. If you are running a huge business, that’s fine – but is it in proportion?
Here’s what works for me: every 3-6 months latest (don’t leave it for over a year like I used to!), I download a CSV of a bank statement. I go through all my expenses and ruthlessly cull half or even 2/3 – anything the business doesn’t really need yet and isn’t necessary for expanding in the next 3-4 months.
Check the best deal for a business address, phone numbers.
Do you really need complex accounting software? I’ve used Xero and A2Xaccounting for 2 years. I still can’t make my bank accounts reconcile with the system – the result is that the Xero accounts are wildly out with reality.
I’m giving up and saving myself £50 a month.
For sales and profits tracking, I find cashcowpro really really helpful at just $29 a month or so.
Bootstrap to start with, get the cash coming in and THEN spend a proportionate amount of money on overheads. You should in any case do things manually to start with so you understand your business numbers and processes.
Face it, we mostly check our sales stats more than once a day! It’s so easy to overlook overheads but the danger is that all your hard-won gross profits get swallowed in your overhead. I’m embarrassed to admit how long I let that happen. Don’t copy my mistake!