MBA2643 3 Hidden Costs Killing Your Business Profits

Profits are up, customers seem happy, and you’re putting in the hours—but something still feels off. What might be quietly draining the bottom line, even when everything seems to be running smoothly? In this new lesson, Omar breaks down the three hidden costs that could be silently eroding your business profits. You’ll learn not only how to spot these threats, but also exactly what action steps you need to take to stop the leaks and boost your margins. Ready to uncover what’s really holding your business back? Hit that play button up top to get the practical strategies you need to protect your profits and make every effort count. Download the P&L Sheet here: Download LinkWatch the episodes on YouTube: https://lm.fm/GgRPPHiSUBSCRIBEYouTube | Apple Podcast | Spotify | Podcast Feed

• 0:00Speaker 00

  Small business owners, listen up. You started your business, but you can't do it alone. And that means you have to hire people to help. That's where Justworks comes in. Justworks is the payroll, benefits, and global hiring platform to unburden your brain from all the complicated small business stuff. They handle the things you can't afford to get wrong, so you don't have to worry. So you can focus on the parts of running a business that you enjoy, knowing everything else is running smoothly. You don't have to worry when it just works. Ever invest in something that seemed incredible at first, but didn't live up to the hype? For example, I really wanted to love the show Mad Men. I really tried to watch it and love it, but it just didn't do anything for me. As a marketer and business person, the show was a little bit of a disappointment.

• 0:45Speaker 00

  Marketers know that feeling. They optimize for the numbers that look great, like impressions. But then, we don't see revenue. LinkedIn has a word for that: bullspend. Instead, you can get the highest ROAS of major ad networks with LinkedIn Ads. Cut the bullspend, advertise on LinkedIn. Spend $250 and get a $250 credit. Go to LinkedIn.com/MBAShow. Terms apply. You could be doing all the right things. Your product is solid, your sales are growing, your customers are happy. And yet, you're still not making the kind of money you should be. Why? Because there are hidden costs, silent profit killers, I call them, lurking inside your business.

• 1:28Speaker 00

  You don't see them, but they are eating at your profit margins. And the longer that they go unchecked, the harder it is to scale your business. So today, I'm going to break down three hidden costs that quietly destroy your profit, and exactly what to do about each. These might surprise you, because they're not the obvious things, and that's why they're silent killers. So let's get into it.

• 1:55Speaker 00

  Welcome back to the $100 MBA Show. I'm your host Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business.

• 2:08Speaker 00

  Number one with a bullet, this one's a killer, time waste masquerading as productivity. Let's be honest, busyness is not business, okay? One of the biggest profit killers in your business is time spent on low leverage tasks. These are things that don't move the needle in your business, but look like work, look like things you should be doing. Now, you might be thinking, wasting my time, that's wasting my money? Yes, your time is your biggest asset. Your time is limited. We only have 24 hours a day. Everybody has 24 hours a day. Jeff Bezos has 24 hours a day. Oprah Winfrey's got 24 hours a day. You have 24 hours a day, right? It's limited, and it's actually the ultimate leveler of everybody in the world.

• 2:53Speaker 00

  So, how you use your hours in your business is going to make or break your business, and it's going to either make you money or make you lose money. Let me give you some examples. You're tweaking the design in your website, which has not been proven to cause problems with your conversions. It's not actually making you money or losing you any money, but you're just obsessing about it. Another example, doing customer support, you could be delegating to somebody else on your team, hiring somebody for far less money than it costs you, because you are the founder, you are bringing in business. You are the person that should be doing high value tasks, tasks that bring in $10,000, $100,000 in your business. Another example, rewriting the same email four times. This should never be happening now with AI.

• 3:38Speaker 00

  You should not be wasting time on things like this. I can't emphasize this enough. Time is your most expensive resource, and it's the one resource that most people waste. So, what do you do about it? I need you to audit your week, write down everything you did in the last seven days. Assign a dollar value to each task. Is this a $10 task? When I say $10, I mean, does it bring in the value of $10? Into your business, or is it a hundred dollar task? Or is it a $10,000 task? You gotta see it in black and white, in your face, be honest. Then eliminate or delegate anything under $100 an hour of value. That means you should be giving this to somebody else, or just cutting it out from your business completely. Now, $100 an hour is not high value even,

• 4:23Speaker 00

  but we gotta start somewhere, okay? Eventually, what I want you to do is give yourself an hourly rate, and don't do anything in your business, or even in your life, that is less than that hourly rate. So, think for example, like, I like to give myself an hourly rate that makes me a little bit uncomfortable, like $800 an hour. If something is gonna cost me less than $800 an hour to get done, I should delegate that. If you're doing $10 an hour work, you're building a $10 an hour business. That's just the bottom line. Number two, this one's very easy to miss, and that's reoccurring charges that start to bloat. This is also known as subscription creep. You're paying for tools that you forgot you had, or you haven't used in a while.

• 5:07Speaker 00

  So, what do you do is you go into your PayPal, you go into your credit card statements, and take a look at at least the last six months. What are the things that you were paying for, every single month, or maybe even every single year, that you don't use, that you rarely use, or you only think you need, right? If you haven't used it, you don't need it. Guess what? If you need it, you can always re-sign up. And most softwares will allow your account to be reactivated as you're not losing any data. But the point here is that some of us, if we add up some of the things that we're not using, that we're paying for month after month, or year after year, it could be hundreds of thousands of dollars a year. I know this firsthand. I ran a software company that required

• 5:51Speaker 00

  a lot of different tools and software that we tried over and over. And we would go through this kind of itemized list in our kind of P and L and say, okay, we can cut this out, cut this out, cut this out. And every about six months, we'd save about $5,000 to $6,000 a month on our bottom line. Some examples would maybe be like a design tool that you signed up and used once, because maybe now you're outsourcing design. Maybe some extra SaaS tools that you might use later. Maybe something that you only use seasonally. Maybe a plugin that you've signed up for and it's just auto renewing. These tools may only be $20 here, $50 here, $100 there, but they stack up. It could be 500, 600, 1,000, $2,000 a month. And that's a lot of money.

• 6:34Speaker 00

  This is why I highly recommend that you maintain a P and L sheet and you're seeing your expenses every single month. And you plug in the numbers so that you are aware of what you're spending every single month. Now, if you don't have a P and L sheet, don't worry, I got you covered. We've got a free template that you can download with all the formulas. Just go to 100mba.net/templates and you can download all our templates.

• 6:55Speaker 00

  These days, you can get an answer from the internet, an influencer, or AI in seconds. But when it comes to legal matters for your business or your family, a quick answer is not the same as the right answer. With 25 years of experience, LegalZoom knows how to start you off right. When you need a legal hand, visit LegalZoom. Go to LegalZoom.com to get started. LegalZoom provides access to independent attorneys and its law firm, LZ Legal Services. LegalZoom is not a law firm and does not provide legal advice. Be honest, as a business owner, how much of your day is actual work? And how much is it just getting ready to do the work? Answering emails, tweaking presentations, hunting for numbers? That stuff adds up fast, which is why upgrading to the premium tier of Google Workspace with Gemini

• 7:40Speaker 00

  is a game changer. One subscription gets you Google's AI right into all your apps like Gmail, Docs, Sheets, and Meet, so it can handle all the heavy lifting across your day. Need a reply drafted in your exact voice? Gemini handles it in Gmail. Need to turn messy spreadsheet data into visual insights? Done in Sheets. Missing a meeting? It takes notes and gives action items in Meet. It acts like a full-time assistant connected across your entire business. Make work less work. Try Google Workspace with Gemini at g-o-o-g-l-e/workspacewithGemini.

• 8:18Speaker 00

  When you start plugging in those numbers every single month, you know, $50 here, $29 here, or $39.99 here, you start to really feel it, okay? You feel the pain and you start feeling compelled to cut anything that doesn't contribute directly to sales or customer satisfaction. That's all that really matters is bringing in customers and making sure the customers are happy. If something might be useful, right? Set a reminder to revisit in next quarter, but cut it, like cancel it. And then next quarter, ask yourself, "Do I need this anymore? No, I don't need it anymore." Then, "I don't need to re-sign it. If I do need it, you can re-sign." You want to keep your tool stack as lean as possible to keep your business as profitable as possible. Number three, huge silent killer, poor processes.

• 9:02Speaker 00

  Because poor processes equal expensive mistakes. This one's really sneaky. Every time there's a miscommunication with a client, a deadline that's missed, an appointment that's missed, a customer complaint due to a mistake, whether it was from somebody on the team or you. It's usually not a bad employee or, you know, just a one-time mistake. It's a broken or non-existent system. A bad system in your business causes rework, refunds, stress, and profit leakage, leakage in your business, like a leaky bucket. Here's a story. Back when I was running Webinar Ninja, my software company, we once sent out an email to 10,000-plus units with a broken link, okay?

• 9:46Speaker 00

  A link that did not work, it was a little typo. Why? Because we didn't have a double-check process in place. We didn't have a system or a SOP, a standing operating procedure where we said, "In this process, we're sending out emails, we need to do a test email. Go into the email in the inbox of that test email and click on all the links to make sure they work." That one email cost us $12,000 in lost sales that week. So, one process could have saved us $12,000. $12,000 is no joke. Now, that happened in the early stages of our business. That happened later on when we had a larger database and more potential customers. It would have been a lot more than $12,000. That would really, really hurt.

• 10:29Speaker 00

  So anytime you're doing any kind of task in your business, you want to systemize it. You want to document it. Use checklists, use setting operating procedures. This literally just means like a Google Doc where you write down the steps of any procedure that you do regularly. If you can automate it, automate it because that way you just make sure it's perfect once and it just runs that play over and over. You want to train your team to own the outcomes of whatever tasks they're doing and to create the system and that SOP so that they take full ownership of that task. Every system you build protects your profits. Listen, I know you're showing up, you're building, you're working hard. I get it. But sometimes the money you're missing isn't from too little effort.

• 11:14Speaker 00

  It's from the effort spent in the wrong places. You know, I grew up in an immigrant household. My parents immigrated from Egypt to the US. You know, hard work was like our middle name. We had to work hard. It was just part of our upbringing. And I just saw the harder I work, the more I'll achieve. But at some point in your career as an entrepreneur, you're going to realize that it's not just about working hard, it's about working smart, right? Don't work hard or work smarter, so they say. Sometimes you just don't need more hustle. You need more clarity. You need better systems. You need to get better at what you do. When I used to play organized basketball, my coach used to say, "Practice doesn't make perfect. Perfect practice makes perfect." You have to practice properly in order for that to work.

• 11:56Speaker 00

  So take this episode as a moment to stop and say, "Where is the money leaking in my business? Where am I working hard but not working smart?" Plug those leaks and you're going to find your business starts to breathe again and have healthy margins. You deserve to be profitable. You deserve a business that rewards all this effort that you're putting into it. But it starts right now with awareness. You got this.

• 12:24Speaker 00

  Thanks so much for tuning into the $100 MBA Show. If you want to go deeper with me, you should sign up for my Three Things newsletter. It's absolutely free. It's my way to coach you from afar. I don't do any private coaching. This is a way for me to kind of have a deeper relationship with you because I want to send you what I believe you should be working on or helping you grow every single week. Every week I send you three things. Something to think about, so you're building a strong mindset. Number two, something to do, so you're taking action every week. And number three, something to learn, so you're skilling up and becoming better and better. Again, it's free. Just go to 100mba.net, sign up for any of our freebies, and you'll get added to our newsletter automatically. All right, until next time, keep moving forward. I'll check you in the next episode. Take care.

• 13:17Speaker 01

  Building a portfolio with Fidelity Basket Portfolios is kind of like making a sandwich.

• 13:23Speaker 01

  It's as simple as picking your stocks and ETFs, sort of like your meats and other toppings, and managing it as one big juicy investment.

• 13:34Speaker 01

  Now that's pretty good. Learn more at fidelity.com/baskets. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE, SIPC.