Joel Fried CPA PC

As we approach the new year, there's no better time to take a hard look at what's quietly draining your profits. Many small business owners start January with ambitious growth plans, but here's a secret: sometimes the fastest path to profitability isn't adding more—it's cutting what's holding you back. So where is this "deadweight" hiding? Usually in three predictable places:

1. Nix those sneaky subscriptions.

Let's start with the easiest win: forgotten subscriptions. That software you signed up for during a free trial and the premium membership you "might need someday" may be small expenses—$29 here, $79 there—but they sure add up fast.

Now’s the time to pull your bank and credit card statements from the last three months and highlight every recurring charge. If you can't immediately explain its value, it's time to cancel.

2. Do you have products or clients that don't pay off?

Next, examine your offerings. Which products or services consume disproportionate time, resources, or mental energy while generating minimal profit? Calculate the true cost—not just materials, but your time, employee hours, and opportunity cost. You might discover that your "signature service" is actually your biggest profit drain.

The same logic applies to clients. We know it feels counterintuitive, but some clients cost more than they're worth. The ones who demand constant revisions, pay late consistently, or require excessive handholding may be preventing you from serving better clients. Strategic client pruning isn't ruthless—it's responsible business management.

3. Be ready to renegotiate, redirect, and automate.

When did you last review your vendor agreements? Loyalty is admirable, but your suppliers aren't being loyal if they're overcharging. Get competitive quotes annually. Even if you don't switch, you'll have leverage to negotiate better terms.

Your marketing deserves scrutiny, too. Track which channels generate the most customers. If that Facebook ad campaign hasn't produced a single qualified lead in six months, redirect that budget. Don't confuse activity with results.

Identify time-wasting processes ripe for automation or elimination. If you're manually entering data that could sync automatically, or holding meetings that could be emails, you're burning money in the form of lost productivity.

Then, calculate your annual savings

Here's the exercise that changes everything: calculate what all this deadweight costs you annually. Add up those unused subscriptions, multiply the hours you spend on problem clients by your hourly rate, and factor in the opportunity cost of time and resources wasted on underperforming activities. The number is usually shocking—and motivating.

In the coming year, resolve to run a leaner, more profitable business. Your future self will thank you when you're focusing energy on what drives growth.

Need help identifying what to cut? We're here to help you analyze the numbers and make strategic decisions with confidence.