Why would two women flush the equivalent of nearly $120k down a restaurant toilet? That’s what prosecutors in Geneva want to know in addition to determining whether they committed a crime. Flushing money down the toilet is a mistake I see business owners and leaders make all the time. While you may not literally be pushing the toilet handle down, you may be automatically flushing cash in one of these three ways:
One of my clients recognized the additional value he was providing his client beyond the original expectations in the agreement and easily raised their annual fee from $45k to $75k, nearly doubling their price. When was the last time you evaluated the profitability of each client? Are you leaving cash on the table with your clients? Do you have long term clients for whom you have never raised prices? Retaining unprofitable accounts without a strategy is the equivalent of flushing money down the toilet.
Last year I interested in a $500 product but eventually decided not to buy. Reviewing the product again this summer, the price was now $1200. I waited and the offer price kept inching down to $1000 then $800 until it reached $500 again. While I do not advocate selling this way, ensuring you get the best offer whether that is through discounts or additional benefits is paramount to a healthy P&L. When was the last time you reviewed your vendor list? Are you paying for services you are no longer using? Are you paying for two CRMs or quoting tools and only using one? Are you overpaying on insurance? Are you regularly evaluating the return on investment for your marketing spend? Liberate yourself from these pesky cash leaks.
Your cash may be slowly trickling out via your payroll every two weeks. Are you paying sales people who are not meeting quota month after month? Engineers who are consistently late on projects? Team members who spend a lot of time socializing and then complain of being overworked? Is everyone on your team fully engaged and performing at a high level? Review each of your team members and their compensation. What does your gut say when you review the data? If your reaction isn’t “worth every penny” then perhaps it’s time to demand excellence.
What ways might you be automatically flushing money down the drain? Find at least one leak this week and fix it.