Controlling Your Expenses Is Easy and Seductive, But Focusing on Your Revenue Growth Is Where You Make the Big Bucks in Life and Business

Get the Biggest Return on Effort

It’s seductive to focus obsessively over your expenses.

They’re easy to quantify and give you, the small business owner, the illusion of control. It’s satisfying to shave off costs — to eliminate the duplicate subscriptions, the apps you no longer use, or to order the toilet paper in bulk. There, in black and white, is proof of your business acumen.

Focus too much on them and you’ll give up a ton of cash.

You’re spending too much time and energy in a scarcity mindset and starving your business of cash. Here’s why. Expenses can be sorted into 2 types: fixed and variable. You have to pay fixed costs and they can’t be easily reduced.

Variable costs, either go up and down with sales or can be quickly turned off when times are tight. In other words, not all costs are the same, so while you think you’re focusing on the big “E” of expenses, you’re really addressing only a fraction of them.

So put your focus where it will make you the most money.

Do not manage your business like a balanced see-saw between expenses and revenues. The boost you get to the bottom line from squeezing your costs is teeny unless you’ve been spending like a drunken sailor. What you want is mouse-sized expenses compared to elephant-sized revenues.

We want as much imbalance as possible on the teeter-totter.

Because revenues, unlike expenses, are uncapped. If you cultivate the abundance mindset needed for revenues rather than the scarcity mindset needed for controlling expenses, you will make bank.

Why?

There are a million ways to grow the top line. Answering open-ended questions like “What else can you do to drive sales? How better can you reach your superfans? What value can you create for your people?” is where your true business chops are earned, not on the spreadsheet.

Focus on the elephant, not the mouse to get the best return on effort.

Photo credit: Humanities