The Leaky Bucket theory is a handy analogy and one which I use a lot with my clients.
Think of your finances in this way: The money you earn flows into your bucket. The money you spend inevitably leaks out and you are left with either a profit or a loss.
But there can be holes which, no matter how small, allow money from other areas to trickle out. Most of the time these leaks are unnecessary and completely avoidable, yet difficult to find or seemingly too insignificant for a busy Business Owner to notice.
My goal as a coach is to use this ‘leaky bucket’ theory to offer an outside, experienced perspective and patch your leaky bucket as best as we can. If you’re frustrated that your business seems to be doing well but your profits aren’t matching your expectations, you might be leaking money.
The obvious way to fill up your ‘financial bucket’ is through increased sales and a drive to increase profits. Patching your leaky bucket isn’t just about savings or driving more sales, though. Taking a look at how you manage your expenses and your finances can pinpoint unnecessary spending that is hurting your bottom line. However, it is just as important to take a closer look at any potential losses resulting from factors such as utilities, team performance, procedures to purchasing decisions and even credit-card processing.
I place great importance on reviewing the P&L on a monthly basis, looking in every nook and cranny for hidden savings. Many expense leaks are the result of seemingly minor choices which add up to a lot of lost cash. Even if you think you have all your expenses under control, its worthwhile to do a quick check for any cash drips.
