S6E12: Death by a Thousand Subscriptions - How Hidden Costs Are Killing Your Business Cash Flow

Sneaky subscriptions killing your cash flow? This week, Pam spills the truth about her own subscription overload and walks you through a simple, no-fluff process to cancel the crap and keep more of your money.

Transcript

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Foreign. Hey, welcome back to the Cash Flow Podcast. This episode, we are going to be doing a True Confessions episode, Death by a Thousand Subscriptions. So we're going to talk about something that is both my pet peeve and my worst vice. I don't know if you're like me, but I have a little bit of trouble with one particular thing about being a business owner. And no matter how hard I try, I have not gotten better at it. However, it is something that can make such a big difference. So I thought it was time to come on, confess my own issues, and help share with you some tips for what to do if you have the same problem. So what are we talking about here? The inevitable slow leak that happens in your bank account when you have a ton of subscriptions or trainings or you name it, that you've set up over time and haven't canceled. Now, these fly under the radar, right? Because they're often so small you don't really see it happening. We're used to addressing the big hemorrhages, like, you know, oh, my God, I lost a client, or my, my contractor just doubled their prices or whatever it might be. But these little leaks are the ones that actually hurt you. And I don't know if you're like me, but like, literally, as I'm looking at an ad that has caught my attention and I've hit the Learn more. And then I go over there, I'm like, oh, that's interesting. Maybe they have a freebie. And I click on it and there's a freebie, and then I get in and I start using that freebie for a couple minutes. I'm like, oh, I should upgrade, because then I can do abc. And then, oh, if I'm going to upgrade to gold, I might as well upgrade to platinum. I know I'm going to get there anyway. I know that if I get gold, I'm going to get everything done and it's going to say, upgrade to platinum if you want to really do such and such. So I just shoot right through all the barriers, make it very convenient, and hit buy me the platinum right now. Not a good idea. So the other thing that happens, of course, is that then I leave them be for months and months and sometimes years. So you. I end up building up this huge amount of money leaving my account that I don't pay any attention to because it's tiny. And these little reminders come in your email that's already massively cluttered and say, you know, hey, we're going to renew your 1499, or we're going to renew your 35.99, or we're going to renewal your$200 a month subscription or whatever it might be. And we all need software, we all need training, but we don't need the ones that end up ghosting us because of our own actions. So I want to talk about a couple things you can do. First of all, just a process on how to go through this. Like in 30 minutes you can change your life, quite frankly. And I'm going to walk through that 30 minute process to get rid subscriptions, the ones that you need to get rid of. But then I'm going to give you a couple of tips of what really made it work for me. Because I don't know if you're like me, but you can give me a tool for something and it could be the best tool in the world or the best idea in the world. My emotion's still going to take over and do what it wants to do. And so I've put a couple tips in place that help keep that emotion in check that I just want to give you as ideas that might help for you as well. So first of all, hit me in the comments if you are an addict like I am, to the purchase of every software, every app, every training that comes across that you think, oh, that might do me some good someday. Guilty. Okay, so I want to know how many of me are out there because maybe we form a club or something. But how do I deal with this now? So I'm not just responsible for myself anymore. I've got a team, a company, clients, vendors, all of the above. So I knew that this runaway habit of mine had to be brought into check. And I'll be honest, we're in the process of it, but it's not fully fixed yet. I am still misbehaving occasionally. So what do we, what have we done and put in place? Well, a really good tool is to look at 90 days worth of bank statements and credit card statements. Okay? You can do this a couple of ways, right? You can print them out, literally go through with a pencil and highlight all of those things. You can download the transactions from your bank and sort them by vendor and look at them that way. Or there are some softwares out there that'll do this for you. Somebody joked this morning I should have, what is it? Rocket. Rocket Money as my sponsor. Because, you know, this is definitely an addiction of mine and Rocket Money is one of the ones that helps you deal with these things. So. But, but if you're going to do it on your own and you just want to get it done. You don't want to buy another software to fix your software problem, which is a little bit of a catch 22. Just literally get that bank statement information and make a list. And I want your list to have four columns, okay? Four columns, that's it. The first column is the name of the software, the second column is the price, and the third column is the last date that you used it. That's the killer. And the fourth column is keep or kill. Okay? So first column is the name, second column is the price. How often? You know, $20 a month or a hundred dollars a year, whatever it is, third column is the last date that you used it. That's the embarrassing one. And then the fourth column is keep or kill. But you're not going to fill out that fourth column yet. You're just going to fill out columns one, two and three. And if you're like me, you're going to have a list of pieces of software or trainings or apps that you've bought and paid into. And what I want you to do after you put that cost per month in the column or the cost per year in the column is figure out how much that is actually costing you a year, right? So take those little ones that are every month and multiply them by 12 and take the annual ones and add all that up and you're going to be mightily surprised how big that number is. I don't care whether your business is a four figure business or an eight figure business, relatively speaking, this is going to be a big number for you, very likely. So once you've done that, now what I want you to do is go in and look at any of the ones that you haven't used in 90 days or that you don't remember when you last used it. And this is the hard part, right? Because what your emotions are going to do with you is say if you're like me, what my emotions do with me, I should say is they go, well, you haven't used it in 90 days. But boy, I can really think of when I might use that. I'll make a point of doing it this week and I'll look into it. What I've had to do is say, no, no, Pam, no. And that anything that's not been used over 90 days relentlessly, without exception, I have to say, no, no, no, no. Or kill two in the fourth column, kill, kill, kill, kill, kill. And if kill is too violent a word, for you, just use, cancel, get rid of, you know, end, end. And no exceptions, because the minute I give myself that tiny little inch of, well, maybe it opens up Pandora's box and all of a sudden I have to keep all of them. So that's been something I've made myself do as I've gone through the list, number one. Number two is once you do see that you've used it within the last 90 days, now I want you to highlight the ones that are actually critical to your business. Okay? Don't go through yet and say which ones you're going to cut, but the ones that are in use all the time that you're absolutely aware of the fact that you're getting a return on that spend. Like those top 10 or 10% even, that are like, yep, these. I used to run my business. I'm proud of the fact that I buy them and utilize them really well. And that's going to be like, let's call it the top 10% of them. You highlight those, you're like, cool keeping those. Then for all of the rest of them, though, now you've got a pile left where you've used them in the last 90 days and you've determined that they are, you know, somewhat useful, but not necessarily required. And I want you to go through just those now and take the bottom 10% of those and say, no matter what. No matter what, I think. So if you have 10 left, at that point, you're going to find the bottom one that you can live without and you're going to kill it. Okay, gone. So now you're going to be left with another bunch of them. For these, what I want you to do is go in and say, okay, is this important? And if you decide, yes, it's important I want to keep it, then think about, look at all the other software and say, is there another software I can do this with? Which is often the case. That's one question to ask, is there another software I can do this with? The second question to ask is, can I do it cheaper? And the way I mean by that is like, if I'm in the platinum program, what am I actually using it for? And can I get away with the gold program and if I can downgrade it? And the other question is, a lot of times for some of these, you can call and say, hey, look, I'm paying X for this and I really only use it once a month. Can we reduce the cost for this somehow? Like, this is if it's somebody who's actually A coaching thing or a training thing that you check in on on the regular. So that's how I kind of get to a process to narrow things down. And like I said, that's all well and good and I'll go over that process here again from the top really quickly, but that's not going to get you all the way there because as I mentioned at the beginning, for me it has nothing to do with practical logic, which is everything that I just went through with you and everything to do with the emotional addiction, I'll call it an addiction I've got. I won't pretend it's anything else to just keep hitting go and saying, no, I really need it. I'll have to cancel it later. All right, so let's go really back through quickly the process and then I'll talk about the couple of tips I have for you that might be very helpful to make you actually get over the hump on this one. So first of all, you're going to make a four column spreadsheet. First column is going to say what the software is. Second column is how much did it cost? Third column is when's the last time I used it. Fourth column is keep or kill. You're going to focus on the first three columns. You're going to say, have I used it in the last 90 days? If you haven't used it in the last 90 days, it's gone, done, cancel. Okay, if you have used it in the last 90 days, you're going to pick the top 10 of those or 10% of those, let's say, and, and say, okay, I'm going to keep these. I'm not even going to look at them. They're just going to stay. And then you're going to take the bottom 10% of those and say, no matter what, I'm killing that. Okay? Then you're going to be left with this chunk in the middle that you do use. But they're not critical and they're not the worst. And I want you to evaluate each of those to see if we can reduce the cost at all, downgrade the program a bit or incorporate it into another software. Okay, Piece of cake. The whole exercise will take you an hour. And if you do it once a quarter, even an hour, once a quarter, you will be this, I promise you, you will be astounded at how much money you see increase in your bank account. So what is it that makes this so hard to deal with? And the key is that it's an emotional thing. So I want to Give you some tips to get past those emotions that have really started to help me. I'm not pretending I'm cured. I'm not. But it's starting to help me. Okay, the first is assign someone else to monitor the budget for your subscriptions and training. Now, you may not have a team, it doesn't matter. Pick your spouse, pick a friend and say every quarter I'm going to have to show you my bank account to see what subscriptions and trials and training I'm paying for. That hit me on a regular monthly or quarterly or annual basis. And my obligation to you is that I'm going to keep this under control. Just knowing that it's not just you, that you actually have to discuss this with somebody once a month. In our case now, we do it once a month. Frances manages that budget for me. And every time I click one or want to click one or say we can't get rid of one, I have to go through the gauntlet of a series of questions and I hate it. But it's the right thing to do because nine times out of 10, I don't need that stuff. Truly, nine times out of 10, we don't need that stuff. So number one, find somebody else and you have to be accountable to them once a month or once a quarter, it will help. The second thing is, you know, I hit on use of AI a lot here. So one of the things I really suggest for you is to use Chat GPT to do a couple of things. One is, if you feel like it actually, here's an aside. You can upload the PDF of your bank statements or upload a spreadsheet of the charges right into Chat GPT and say, please look through this PDF, identify all of the recurring monthly charges and create me a list with four columns and it will spit out a spreadsheet for you. So right there, I've saved you 30 minutes, boom, it'll do it. So know that, number one. But the other thing you can use it for for is, hey, I bought this software platinum level for this. What other things are available that do it? Or I have these other softwares. What can I do to help mitigate the problem without having to pay for this? Think about the questions that you'd ask yourself in your head or that somebody would ask you if they were helping you cut costs in your business? Just ask Chat GPT. Now, Chat GPT, all of these platforms actually are looking at current real time information. So they could go out there and go, oh my God, you have five AI things that do the same thing, which by the way, I do, which one do I really need? If these are my goals and it'll tell you the best one. And honestly, even if you ask ChatGPT and ask it about Claude and what are some of the other ones? Francis out there? Claude, what is it? Perplexity, Gemini, all you say which of these is the best one for me to keep if this is what I need it for and it'll tell you and it'll be honest. And the cool thing about these AIs is they're kind of non emotional so they'll tell you the truth even if it is not that they're the best. So that's the second thing you can use AI for it. And then the third is, and here's what I've started to do, just so you're aware of this little exit hatch, because I will always find an exit hatch. Now what I'll do when I go and I want to click on something is I do definitely think, do I really want to face Francis about this though? I really need it. Is it important? I'm supposed to call him in advance. I haven't quite gotten there yet, but I'm supposed to. And I go, do I want to face him about this after the fact? And I will say that three times out of ten that stops me. It's like, yeah, no, I don't need this. If there's a freebie, I'll get it, but I'm not going to buy in. But the other seven times I'll still go ahead and click on those. The second thing I do though is absolutely go in right away, use the software and make sure it's something I'm going to use. And if there's anything about it I don't like, like anything. And always anytime you click on a software, there's going to be something you don't like, I kill it right away, okay? And that gets me through another chunk of them. So I suppose the real answer is, if I'm thinking about this logically, is just don't click on the Learn more button. But I can't stop myself. Can't stop, won't stop, can't stop it. Just my hand goes there and clicks. So since I know that's going to happen, I put these sort of backstops in place for the emotional part of this decision, which is an addiction. It's no less than an addiction. And I'm not sure quite how much money we've saved in our business, but in a typical six to seven figure business. Say you're just breaching seven figures. You're going to find going to bet you if you do this exercise at least five to $10,000 a year in stuff that has been clicked on and forgotten. If you haven't done this in a couple years now that we do it every quarter it really goes, there's less and less to kind of call out. But we've really taken advantage of this and to kind of tie this back into last week's episode, which was about paying yourself. When you free this up, here's a way to make it a reward, right? If you're not paying yourself or if you're paying yourself less than you want to be paying yourself, tell yourself that 50% of what you save, that you've been running your business with this cost and you're not bankrupt yet. Right? 50% of what you save, you're going to put in your own business owner pocket. So if you save $5,000, you're going to put 2,500 right in your pocket. Okay? That's a really important, really important thing to kind of give you an incentive to do it. So. So those are the tips for how to kind of deal with the emotional aspect of all of these software subscriptions and apps that I know you have that are billing you $19.99 a month that you've forgotten about. So let me know how you do with this. I'll keep you posted on my successes and failures. But it is such an important item because I will tell you that death by a thousand subscriptions will kill your business just as quickly. Quickly as a bad hemorrhage. And we don't want that to happen. So all the best to you. Have a great week and I'll see you next time on Cash Flow. Hit like Hit Subscribe. Make sure to tell your friends about this podcast and come back for more finance tips when you're ready.