How an Expense Analysis Can Help You Pay Yourself More

If you’re paying yourself less than your employees, it’s time to examine where your money is going. Many small business owners struggle to take home a fair wage despite having healthy revenue. One effective solution is conducting an expense analysis, a tool that helps identify unnecessary spending and redirect funds where they truly matter—like your paycheck.

What Is an Expense Analysis?
An expense analysis involves reviewing your profit and loss (P&L) statement to pinpoint and eliminate wasteful expenses. It’s a simple yet powerful strategy within the Profit First framework that can significantly improve cash flow. By performing this quarterly, you gain a clear understanding of how your money is being spent and uncover opportunities to optimize your finances.

Why You Should Review Expenses Regularly
Business expenses evolve over time. What made sense for your business five years ago may no longer serve you today. Subscription services, software, or vendor contracts can silently drain your budget. By analyzing each line item on your P&L, you can determine whether these costs are still necessary. Even small recurring expenses—like $50 or $100 monthly charges—add up quickly and could be better allocated toward paying yourself.

How to Conduct an Expense Analysis

1. Gather Your Data
Pull up your profit and loss statement on a cash basis for the last 12–24 months. Ensure your financial records are up-to-date and reconciled.

2. Examine Every Line Item
Review all expenses, focusing on recurring charges. Ask yourself: Does this expense serve my business today? Is it essential to growth or operations?

3. Cut Unnecessary Costs
Identify subscriptions, memberships, or services your business no longer needs. Canceling these could free up significant cash flow.

The Impact of Expense Analysis on Your Pay
Nine times out of ten, businesses that look profitable on paper still struggle to pay the owner a fair market wage. Why? Because unnecessary expenses are eating into the bottom line. By conducting an expense analysis, you can reclaim funds and ensure your hard work translates into financial security for you and your family.

You Deserve to Be Paid Fairly
As the business owner, you are the driving force behind your company’s success. While your team is essential, they don’t carry the same financial or emotional burden. Prioritize yourself as the number one employee. Performing regular expense analyses helps you maintain a profitable business while ensuring you get the paycheck you deserve.

By using strategies like expense analysis, you can transform your business finances and take control of your cash flow. Ready to start paying yourself what you’re worth? Start by reviewing your P&L today.