Do you ever feel like it’s Groundhog Day, stuck in a loop where things never really change? Every month, you review your business expenses, and it feels like you’re doing the same thing over and over again: paying for subscriptions, services, or products you no longer use, or maybe never really needed in the first place. You tell yourself, “It’s just how it’s always been,” and keep going through the motions. Sound familiar?

If this is hitting a little too close to home, it’s time to break free from the cycle. Just like the famous groundhog, you can stop predicting the same outcome and take action to create real change in your financial habits. The first step? Cutting just one wasteful expense.

Now, I know what you’re thinking. “But I’ve always done it this way!” Yep, I hear you. Been there, done it, and done it again. Humans thrive in routines, and it can feel risky to challenge the status quo. Profit First teaches us that it’s not just about growing your income; it’s about behavior changes that make you spend smarter. It’s about cutting the fat so you can focus on what really fuels your business growth.

Time to stop wasteful spending and set your business up for more sustainable growth.

The cost of sticking with the way it’s always been

If you’re like most entrepreneurs, you’ve probably been spending money on things that felt necessary in the past but don’t contribute much to your current business goals. Maybe you’ve been paying for a software subscription that seemed essential when you started your business, but now you only use it once a month. Or perhaps you’ve been holding on to an office rental, even though you’ve long since transitioned to a remote team.

In Profit First, the idea is simple: pay yourself first, then allocate money to expenses, taxes, and other needs based on predetermined percentages. This way, profit isn’t just an afterthought, it’s built into your financial structure from the get-go. But beyond that, it also encourages you to be hyper-focused on your expenses. If something isn’t adding to your growth, it’s time to let it go. This isn’t just about cutting costs; it’s about cutting unnecessary expenses that don’t align with your business’s current goals.

Step 1: Review your expenses with fresh eyes

The first step in breaking free from the cycle is to take a real, hard look at your expenses. Yes, I’m talking about that dreaded task of reviewing your bank statements or pulling up your accounting software. I know, it’s not fun. It can be easier to ignore or keep pushing it down the list. But if you want to make real change, you’ve got to confront the data head-on.

Start by looking at your expenses from last month. What did you spend money on that isn’t vital to your business growth today? Here’s a checklist to help:

• Subscriptions and memberships: Do you have any that you haven’t used in months? Maybe you signed up for an email marketing tool but haven’t sent a campaign in weeks. Or maybe there’s a monthly membership that’s been “just in case,” but hasn’t added tangible value recently.

• Software: Are you paying for a project management system you no longer use? Or perhaps you’ve been doubling up on tools, paying for two different services that do the same thing.

• Outdated services: Think about any third-party services you’re outsourcing that no longer serve your business. Maybe you’ve moved to a different software solution, but you’ve been keeping the old one active “just in case.” That’s money down the drain.

• Miscellaneous overhead: Office space, supplies, or other costs that were important in the early stages of your business but have since become unnecessary or redundant.

Once you’ve identified these, take a good look at them. If you’re not actively using these services to grow your business, they’re just sinking your profitability.

Step 2: Apply the Profit First mindset

Now that you’ve reviewed your expenses, it’s time to apply the Profit First mindset. According to Profit First, you should allocate funds into distinct categories: Profit, Owner’s Pay, Taxes, and Operating Expenses, right from the start. This ensures that you’re not just spending your business income without a clear plan. Instead, you’re making sure that profit comes first, and your operating expenses are managed within a healthy framework.

Here’s where it gets interesting. By following this model, you can identify which expenses should actually be moved to a lower priority and which need to be cut altogether. When you’re working with clear categories and percentages, it’s much easier to see where you’re overspending.

Here’s how you can apply this:

• Set a percentage for operating expenses: You can’t just keep spending recklessly, so allocate a fixed percentage to operating expenses based on your revenue. This percentage might shift over time, but the point is to work within your means.

• Use the ‘Profit First’ principle: You should always be taking a portion off the top for profit before anything else. Once that’s set, allocate the remaining money into the other categories. If your operating expenses are bleeding you dry, that’s a red flag.

• Revisit every month: Make it a monthly ritual to review your expenses and adjust your allocations. Cutting one wasteful expense this month is just the beginning. Each month, you should be reevaluating your spending and making sure your cash is being spent wisely.

Step 3: Cut one wasteful expense

Now, here’s the hard part: cut something. I know, it feels like you’re throwing away money, but remember: this is about cutting out the dead weight. You’re not just trimming expenses, you’re making room for your business to grow.

Pick one thing from that list of expenses you reviewed that isn’t critical to your current growth. Maybe it’s a tool you’ve been paying for but barely use, or a service you’ve outgrown. Cancel it. Yes, it’s that simple.

The trick is, by cutting out just one non-essential expense, you’ll free up cash that can be reinvested in something that will move your business forward. Maybe it’s a marketing initiative that you’ve been putting off, or perhaps you could pay off a debt, or even increase your profit allocation.

Step 4: Reinforce the change with a growth mindset

The key here is to reinforce the new habit of scrutinizing your expenses with a growth mindset. Each time you take action to cut wasteful spending, you’ll create more space for profit, more energy for innovation, and more momentum toward building a business that thrives. The more you get used to reviewing your expenses and cutting out the fluff, the easier it becomes.

Take one step today, review your expenses, cut one wasteful expense, and start building a stronger, more profitable business. And remember, just like the groundhog, you don’t have to repeat the same mistakes year after year. With a little focus and a lot of intentional action, you can break the cycle for good.

You’ve got this!

-Mike

PS – Grab your instant assessment HERE. Don’t be scared, it’s empowering!

For guidance applying Profit First to your business, get in touch with a Profit First Professional HERE. Your business will thank you!