Top 5 Expenses to Watch for Small Business Owners

Small business owners are super heroes – they pretty much do it all and have to learn how to wear all the hats of their business. Even if it’s just at the beginning before they start delegating out most of the functions so that they can stay in their zone of genius – entrepreneurs need to be “Jacks and Jills of all trades”.

One of “the hats” that a lot of entrepreneurs are often reluctant to step into or at least usually not very passionate about is entrepreneur finance. Within the finance function of every small business, someone needs to be closely monitoring expenses to make sure the business is keeping as much revenue as possible. As my mentor always said to me “It’s really easy to me a dollar but it’s really hard to keep that dollar”.

Keeping a close eye on expenses is usually not the most fun aspect of running a business and is a great task to delegate out to a scrappy administrator or operations manager who has great attention to detail. But regardless of whether you are a solo-entrepreneur or if you have a team to help you out with monitoring costs, here are 5 expenses in small business that you need to pay attention to!

Subscription and reoccurring expenses

As entrepreneurs, we love creating reoccurring revenue streams for our business – however on the expense side, they can be our greatest enemy. Many great companies and services require us to commit to reoccurring expenses – our accounting software, email providers and other marketing tools are often subscription based. What I consistently find when pulling back the hood of small businesses are that many subscriptions have been forgotten and are just running on automatic and not adding value within the business. It’s time to “cancel” and hit “unsubscribe” to any reoccurring subscriptions you are no longer using.

I highly recommend you go into your accounting software (or excel sheet) or credit card statement right now and take a peek at what you are paying for. There could be anything from a 2nd amazon account that you didn’t know you had gotten signed up for or a marketing app that your team has long abandoned.

Marketing expenses

Marketing is a necessary and very important expense for most businesses (unless they rely solely on referrals etc). That said, make sure you decide on a marketing budget and have a team member both closely monitoring the marketing spending against the budget as well as be consistently evaluating what sort of marketing tactics are getting the best results. Cut back on the ones that aren’t working and double down on the ones that are.


Having your own office can be one of the milestones of feeling like you’ve “really made it” as an entrepreneur. Depending on the city, square footage and business model – having an office can be a huge expense that might be unnecessary. If you don’t have customers coming to your space potentially consider letting some teammates work remotely or getting rid of your office entirely.

Fees and Interest

Fees are often discounted because they are often really small amounts and you think you can’t get out of them. I highly recommend negotiating with your bank around any fees that they are charging you. Also, make sure you are paying your credit cards on time so you aren’t getting dinged with any unnecessary interest fees. As my Father used to say – “credit cards are for really smart people and really dumb people.” Smart people always pay their charges on time and collect lots of points, and the latter group just accumulates a lot of fees and debt.


Finally, there is team, I personally think that investing in the right people to grow your business is one of the best ways to move forward quickly towards your business goals. I think you shouldn’t hire more people than you can afford rather than the approach of “hire people and grow into that size.” From my experience that can be very high risk and it often doesn’t pan out that well. One strategy here is to have a metric around productivity to ensure your team is increasing it’s productivity before you expand your employees. Greg Crabtree author of the book “Simple Numbers” discusses the labour efficiency ratio which is one way of doing this. If you divide gross profit by your staffing costs you will get a number that should be at least 2.75 and hopefully over 3. By tracking this metric you can see how your team measures up.