Expense management is something that not many businesses have mastered quite yet. If you're new to money management, this can be an opportunity to challenge your business to be disciplined with its finances. Here are 8 basic principles for keeping your spending under control and cut wasteful spending.Sign Up to Watch
- Awesome, so why don't we review the eight principles you know with our Thrivers that are watching on how to manage your expenses, the eight principles for cutting waste, what I'll do is, Clay, I'll read the principle, you shoot back the-- I was gonna say the chicken nugget, the the lesson nugget to us, why don't we do that? - I bought 30 chicken nuggets the other day 'Cause my wife wasn't with me. And I went ahead and bought 'em. And they were so good. - [Voiceover] Oh when they're fresh? Any sauce with that? - I don't know they were at any point like an actual chicken, but they were so-- Have you chicken nuggets, have you ever had those? - Oh yeah, mystery meat, I'm telling ya. - It's so good, I don't know what that meat is, but it's so good, okay back to you. - All right, guys, here we go. So principle number one, fly around, circle, and attack when appropriate. - All I'm sayin' is just make sure you know enough about the expense, fly around it. Make sure you know enough about it, and then if you look like, "Hey this seems kind of "abnormal," attack it. You gotta get in there and no one's gonna be more passionate about helping your company save money than you so dive in, knock it out, boom. - Boom, principle number two, don't stop attacking until you have killed the expense. What's the lesson nugget there? - I have a guy that today just, all these things are so fresh because it's the first of the month right now. So I'm dealing with a lot of energy, but I got a guy who, freakin', he's just wackin', he's just charging, he's just charging, he's wacking our credit card, just He's just charging it for stuff, and this is ridiculous, jack ass, but he's like, "178.00 for a call." You called and had a question so 178.00. He had a question about wanting to, 178-- So like I have to fight back and I'm like woop. We've agreed to $3,000.00 for the agreement. Well, I thought it was per-- No, no, So, you have to be passionate because nobody is gonna fight, you and I have dealt with some legal bills before. Nobody's gonna fight to keep those costs down like you. Period. - [Voiceover] Yeah, there ya go, it's your money. - [Clay] Nobody. - Boom. Awesome, principle number three. Use variable expenses when possible. - When you're startin' a company, you need to pay people based on their results, not based on the hours they work. When you grow a company, if at all possible, you want to pay people based on the results and not the hours they work. When you start a company, how freeing is that? Instead of going, I need to pay everyone a salary at a 4,000 a week, and I just hope I get my landscaping company to be successful. No, you say, "Hey listen, I'll pay you a mass." So I talked to a guy today he owns a pharmacy. It was yesterday, I'm sorry, yesterday. Talked to him, Brian's his name, Brian. And Brian says, "Hey look. "I have a very small team, and I pay 'em," to quote Donald Trump, "Huge." He says-- - [Voiceover] Get the hand motion. - "I pay 'em huge. "I pay 'em huge commissions because I want less people "who I pay more." But what he does and his whole system is he wants to go in there and make sure he only pays people based on their production, not based on their hours. You know, and that's a game changer if you can figure that out. - [Voiceover] And that attracts the right kind of, a certain kind of person, right? - Yeah, it attracts the right mindset and once you get to a certain point, I mean I don't know if you'd ever want to hire a complete bureaucrat, maybe at a certain point, maybe that makes sense. - Our principle number four, train your team to seek discounts. - Yeah, bottom line if you're not harpin' on it all the time, talking about discounts, discounts, discounts and incentivize your team to find those discounts, they will not find those discounts. - So I feel like one of these discounts. - When you hit that button, it took me to a place of like Costco, it took me to a place of like, of you know, like Sam's Club. I mean it was coupon cutting moment, it was huge, so boom.
- Principle number five. Consolidate and negotiate better bulk pricing. What's a lesson nugget on that? - Well, just if you're dealing with a lot of vendors, and you buy stuff from them all the time, Stuart and I deal with a lot of printing vendors, but we deal with a lot of people we buy print pieces and posters, because we do a lot of tangibles. Stuart's an unbelievable designer, I'm a man-bear-pig who works with companies, and so, you know, if you're going to pay a company $100,000 this year to print eight and a half by 11 flyers, you want to talk to them, and go, "Hey, what can I do "to get a better discount." Anybody you buy from often, try to get a better discount. - Excellent. Principle number six: Make your suppliers and vendors compete for your business. - Well, unless you're married... Unless you're married, don't run around going, "Hey, baby, I'll tell you what, baby. "There's a lot of women out there "trying to buy what I'm selling. "Boom. You try to earn me every day." Don't do that. But I'm saying it seriously, for the business, you definitely let people know, "Hey, I am honored to work with you "as a vendor. "However, there are other vendors out there, "and I just want to make sure "I'm getting the best deal." You have to make sure that you set up a system in your calendar so that you follow up with a vendor about every 60 days, to make sure you're not getting hosed. - Competition's good. - Competition's great. That's what America's all about. - There we go, there we go. Alright, two more principles. Principle number seven: Reevaluate your suppliers often. - Well, you meet with somebody, and again, if you're married don't do this. I've been married over 15 years. I meet with my wife, and like, "Baby. I mean, do I meet all the qualifications "we originally discussed "back 15 years ago. "I mean am I, like, boom." And I won't do that because, you know what, if my wife had any sort of vision, peripheral or direct vision, she would obviously no longer want to be with me. My wife is a wonderful lady. She just can't see. She has no visual, ocular capacity. But I'm saying this, you don't want to reevaluate your spouse. With a vendor, it's different. You're not committed until death do you part. And a lot of people are like, "Til death do I part with this vendor." So what you want to do is talk to your vendor's and suppliers, make sure you hold them accountable. Make sure they are competing for your business, and they do know that there are other options out there. - There we go. So the last principle. Principle number eight on cutting waste and managing your finances, is create a culture of cost watching. - Well, you want to incentivize everybody to save money. So, bottom line, I'm just being blunt about it, at Thrive 15, our online platform here, I make money when the company makes money. So, I'm going around going, "What the freak is going on "in the bathroom? "Why are we buying that soap? "Could we get a better deal?" I'm always running around going, and I'm honestly always doing two things. I'm going "Is that the best soap we can buy?" And "Is that a good deal?" I'm always doing this. Because I make money if we make money. - The symbolism of that, that you care about those small details, that matters in a culture. - Oh, dude! - Details do matter. - And how do pass those values on to your team mates? The only way to do it is to give them some sort of way to benefit from saving you money. So, my recommendation is to tell your team, "Hey team, "every time we save money, "I'm gonna give you a certain percentage "of the savings." And that's how you do it. - That's good. Excellent. So there you have it! These are the eight super moves on cutting waste, how to manage your expenses. If you have any questions, don't ever hesitate to email us at firstname.lastname@example.org. That email again is email@example.com. There's a button there on your bottom right hand corner of your screen that says "Ask us any business questions." Feel free to press that button, use it to your advantage. And remember, the workshops here at Thrive 15, they're included in your monthly membership. Take a hold of that, seize the moment, we love to see you succeed, we're here to help you. We'll see you next time!
Send us your email address, and our team of elite minds will get right on it.