Here’s a simple framework to evaluate your expenses and keep your business lean, efficient, and thriving.
The 4 Questions to Ask About Every Expense
When deciding whether to keep or cut an expense, ask yourself these four key questions:
1. Does This Expense Directly Increase Revenue?
Some expenses are investments—like marketing and advertising—that should bring a measurable return. Expenses that generate revenue are keepers…as long as they are doing their job!
- Example: Evaluate your marketing campaigns. Are they generating leads, increasing appointments, or driving sales? If not, pivot to a strategy with a better ROI.
- Pro Tip: Track performance metrics for marketing and advertising expenses to ensure you’re getting value for your investment.
2. Does This Expense Help Lower Other Costs?
Sometimes spending money upfront saves money in the long run. Expenses that prevent larger, recurring costs are often worth keeping.
- Example: Investing in professional accounting rather than DIY can save you tens of thousands of dollars or more in penalties and interest, not to mention other compliance risks. It also frees up your own time to generate revenue. Win win!
- Pro Tip: Analyze whether an expense reduces risk, maintenance, or inefficiencies elsewhere in your shop.
3. Does This Expense Boost Efficiency?
Time is money—especially in a bridal shop, where managing appointments, inventory, and customer interactions can take up significant resources. Expenses that save time often pay for themselves in productivity gains.
- Example: Investing in tools like BridalLive can automate scheduling, streamline inventory management, and save hours of manual work each week.
- Pro Tip: Focus on expenses that free up your team to spend more time where it matters most—helping brides and closing sales.
4. Is This Expense Essential to Operations?
Some expenses are here to stay because they are critical to keeping your shop running, such as utilities or cell phone plans. However, even essential costs can sometimes be reduced through negotiation or bundling.
- Example: Utilities are a necessity, but are you paying for features you don’t use or failing to take advantage of discounts or updated pricing plans?
- Pro Tip: Don’t assume fixed costs are set in stone. Regularly revisit contracts or services to ensure you’re getting the best rates possible.
Practical Steps to Start Cutting Costs
- Conduct an Expense Assessment every 6-12 months: Identify services or subscriptions you’ve outgrown and redirect those funds to higher-impact areas.
- Audit Your Expenses: Go through your P&L and categorize every recurring expense. Label each as "Revenue-Generating," "Cost-Saving," "Efficiency-Boosting," or "Non-Essential."
- Measure ROI: For any expense tied to marketing, software, or tools, calculate its return on investment. If it’s underperforming, consider cutting or replacing it.
- Look for Consolidation Opportunities: Can you bundle services or switch to a single platform that meets multiple needs?
- Get Input from Your Team: Your staff may have ideas on where to streamline or where to invest for better results.
Keep the Muscle, Cut the Fat
Every dollar counts in a bridal shop. By using this four-question framework, you can cut costs strategically—eliminating the fat while keeping the muscle. Remember, the goal isn’t just to spend less but to spend smarter.
Take action today: Review your expenses, focus on what drives revenue and efficiency, and trim the costs that no longer serve your shop. With this approach, you’ll stay lean, strong, and set up for success.