Double Your Profit Day #27 Are You Wasting Money On The Wrong Things?

Welcome back to the Double Your Profit series. This topic's kind of a fun one. It's called strategic versus non-strategic costs. The concept here is you want to spend more on costs that are strategic. So maybe that's marketing, maybe that's physical location. This strategic cost drives your business forward. Non-strategic costs is the opposite. It is a cost that does not move the business forward the more money that you spend. And you might be They're thinking like, well, why would anybody do it if it doesn't move the business forward? And I'm here to tell you that everybody does it. Like everybody does it. So you have to be really careful cuz the hardest thing here is determining what is a strategic cost and what is a non-strategic cost. Strategic cost could be your marketing team. You have invested inside your marketing team. You have brought on the best agencies, you've brought on the best internal team, you've brought on the best combination. A non-strategic cost could be having like 30 people on HR. When you need two, if you sort of followed Elon Musk taking over Twitter and him laying off, I think eighty percent of the staff. That was kind of a perfect example of this lesson. But if you're investing a ton into HR or headcount or all these different like non-strategic things, then you're not moving the business forward. I'm going to give one that I see kind of often, which I think is funny. So physical location, it can be a strategic cost, and I think I think that's where it gets dangerous. So hey, I need an office close enough that where my customers. Will search for it in a safe neighborhood so people want to show up. But what I often see, and I have good friends that have done this, is they overinvested. Non-strategic would be, hey, I only needed to spend $1 million to solve that first problem, or $500,000, or maybe like $2,000 a month in rent. I did not have to make that big of an investment to solve the strategic portion of this problem. Another example for strategic versus non-strategic would be automation and AI. Are you spending more than your counterparts in automation and AI. By reducing friction, by reducing costs inside your business using automation tools or AI tools, you will drive greater profit, which means that you can invest more in other areas of the business. That is strategic. Strategic costs grow your business. Non-strategic costs don't. Evaluate them carefully. Evaluate them often. And make sure you can really tell the difference between strategic and non, because this will move your business forward. Make sure you like and sub for more.