683: (Solo) The Expense Audit That Could Save Your Brand Thousands This Year

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1:03Welcome back to another episode of the Founder to Founder solo podcast where I share all the lessons I've learned from building founder over the past 12, 13 years. So I want to talk about something today that most founders put off and it's not sexy. It's not exciting. This is not a new growth hack and it's not going like viral on a Twitter thread, but I think this is one of the highest leverage things you can do for your e-com brand right now. I know, you know, businesses are hurting. I know things are changing in the economy and I've been there, right? I've gone through tough times from a cashflow-based perspective and I want to walk you through my go to line by line going through your expenses because here's the thing, right?

1:49I never forget this once a mentor told me, Nathan, a dollar saved is a dollar earned. Now, depending on your margins for your brand, it probably is more than a dollar earned. It's probably a dollar and 30 cents or a dollar and 40 cents, a dollar and 50 cents earned depending on your margins. So I cannot stress this enough. If you are listening to this episode, whether you're driving in the car, whether you're in transit somewhere, I want you to pull over. Please take note and implement these things in your business. Run the audit and I promise you we will make you, depending on where your business is at, I will make you, in terms of dollar saved, dollar earned, thousands if not tens of thousands, maybe even hundreds of thousands of dollars saved over a year's period.

2:35Nathan Chan:Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:49Let's kick things off. I'm just going to go through line by line. I'm going to hit you. You're going to feel like you're drinking from a fire hose, but this is a good one. So this is something that I've had to do in the past and it's been a really, really, really fruitful exercise. So let's just kick things off. The first one is Shopify app bloat and SaaS subscriptions. This is the first place that people tend to go. It's probably the most obvious one when it comes to saving on costs. Software is an obvious starting point. Most e-commerce businesses, they accumulate tools over time. I can tell you right now, founder pays for like over a hundred different tools still to this day.

3:25At peak, it was like 150. It was absolutely insane. So the data shows us that on average, a growing store has between 15 to 30 apps installed, but they're actively only using eight of them. So that's the first place, right? Each tool can be sneaky and $30 a month here,$30 a month there,$90 here,$50 here. It actually adds up. And what you'll find is your team isn't actually always using these tools. So if you're a solo founder, go through them line by line and really use AI to go through like line by line and see if you can actually use Claude code to replicate these tools. If it's not going to be too hard of a build, not going to be too difficult, that is something that I cannot absolutely stress enough.

4:12So that's the first piece of the puzzle. What can you remove completely and your business can go without? Then the second piece of that puzzle is I want you to contact every single software tool and ask them what they can do for you in terms of negotiation saving. You would be surprised when you ask these software tools how much they can actually move now obviously there's some room always for them because they sell annual software licenses so they can help you on a monthly right so i guarantee you every single one will want to retain you so see what you can do once you've got all of them removed you've gone for the process with ai what can claude code replace and there's some simple ones for sure like that you can definitely replace with claude code and then depending on the size of your business.

5:02Now we actually have at founder a dedicated owner, not just our head of finance, but a dedicated owner of our SaaS tools. And they actually have a KPI to keep that monthly number under. And then approval has to go through the finance department if we're going to stretch beyond it. So there's the AI piece. Then there's having an owner, depending on the size of your business, and then going and negotiating every single one. You would be surprised of the critical ones that you need, they will move. Another one that you want to look at is your 3PL and shipping costs. So most founders, they only negotiate their 3PL rates when they sign the initial contract, and they never look at them again, and they just pay the invoice every month.

5:43And you need to understand, like your pick and pack fees, right? They add up, right? It's, you know, anywhere between$1 to$3 for every item, and then, you know,$0.30 to$0.75 for each additional item. And if you're paying more than that, you're likely overpaying. So the silent killer here is these three PLs could be making a lot of money off you. So once again, let's negotiate them, right? There's a great place to look, like put in your numbers into AI. Like what can you do there? This was like a really, really interesting one. Merchant fees as well. Founders treat payment processing fees like taxes.

6:18Like you assume they're fixed, but not always. Like Shopify, they make a lot of money off payments. So if you are doing decent volume, you can renegotiate. Merchants all the time, like Stripe, look at alternative gateways. So that's a big one. What can you do there on merchant and processing fees? So what can you do with your merchant fees? The sale is made, the money comes out before the funds even hit your bank account. Another good one is manufacture and supply negotiation. When was the last time you negotiated your cost of goods sold? like a 5 % reduction in your COGS can boost your gross margin significantly.

6:59And that compounds across thousands and thousands and thousands and thousands of units. So you need to be negotiating volume discounts as you scale. What can you do from a cashflow perspective? You need to be pushing for net 30, net 60 terms. My friend, Daniel Daylon, shout out to him. He's an absolute legend. You know, he saved so many businesses and really helped them. How can you get somebody on the ground that is in China that speaks the local language. You can save a lot of money. Packaging optimization. Personal story here. When we were running Healthish in the early days, when we were shipping out Healthish products, we had custom tissue paper.

7:37Like it cost 12 cents per sheet. Absolutely nothing. So when you're shipping thousands of dollars, you don't need a special pretty box. You can just do it in a nice way with shipping paper. That was a tip from my friend, Jake McKeon. Shout out to Jake. Like that was awesome. You don't always need the custom mailer boxes. You can strip it down. You know, it depends on brand, but this is a good, easy one. We talked about AI. What can you do for creative, right? What can, you don't need an agency for creative. How can you send more product to influencers, get them to create the content for you? There's some crazy things happening now with AI.

8:14We help a lot of our members at founder operators. If you are not part of founder operators, make sure you sign up, make sure you apply. We're doing some crazy stuff, helping a lot of our members really roll out AI in a big way for AI creative. Do not use copywriters anymore. There's some crazy things you can do with models now. There's so many things you can do with your email flows. Really, really, really, I can't stress this enough. Where can you use AI? Look at your freelancing costs. Look at your contractor costs. Cut them all. Cut them all. When we talk about as well, people, headcount, I know it's not pretty, but AI agents, there's so much you can do.

8:50much more efficiently here with Claude Code, autonomous agents, using Hermes, Claude. There's so many cool things that you can do now.

8:59Nathan Chan:Now, if you are using an agency, my recommendation is let them go. Bring it in-house. Agency retainers can be anywhere between$2 ,000,$3 ,000,$4 ,000, $10 ,000 a month plus ad spend. The truth is no agency is ever going to care about your brand as much as you do. Where you can, bring it in-house. That's what founder operators is all about. Please really consider, I urge you to bring your marketing in-house, build out your capabilities in-house however you can. Now on the spirit of paid advertising, meta ads, what can you do on the invoicing side? Google ads, what can you do on the invoicing side?

9:37I know meta specifically, they can give you a net 30 arrangement that will help a lot with cash flow. Obviously, there's a limit, right? Depending on how much you scale, they've recently changed their terms and limits that you can't go crazy. I think it caps at about$150 ,000,$200 ,000 wherever you are. That's the case for Australia. But if you're spending, you know, 50, 100K, 200K a month, like this is a massive cashflow advantage. Another one, your credit cards. We use American Express for founder for a lot of our paid ad stuff. And, you know, you collect points, then all staff travel, all of that good stuff.

10:13Really, really cool, right? And then Amex, good cashflow facility. What can you do from a cashflow management perspective. I know that Shopify capital is something you've got to be careful. Word of warning with Shopify capital, the actual terms are actually really savage. Avoid those if you can. And then the last one that I want to talk about is really focusing on your ad spend attribution, right? Research shows that businesses waste around 26 % of their marketing budget on campaigns that are simply not performing. So what can you do there, right? What can you do to have better creative so you get better click through, so you get more efficiency with your spend, you might be surprised, right?

10:54Take a portion of your budget, putting it back into just making better creative. It's a great way to look at kind of your attribution and your spend and how you can get more from your budget. We're living in an Andromeda world where creative is absolutely everything. Creative volume and velocity is absolutely key. Anyways, guys, that was drinking from a fire hose. I hope you enjoyed this episode. Shoot me a DM. Shoot me an email. We'd love to hear if you found this valuable. And these are the kinds of things that we talk about inside Founder Operators. It's our advanced D2C community. We'd love to have you join us.

11:28It's a very exclusive community. We're working on some really, really cool stuff to help our members grow and scale. It's a worldwide community. It's so cool. I'd love for you to be a part of it. So if you would like to join, go to founder.com forward slash operators. It's pure application. We can't let anyone in. We have to go through a formal process and us doing an audit to see if we can actually help you scale. But it's crazy. We only launched operators like literally three months ago and we've literally doubled and tripled some brands. And these are not small brands. We're taking one brand from like 80K a month to close to$170 ,000 a month.

12:03In fact, he has to now get a 3PL because he can't keep up. He can't pick and pack the orders himself anymore. So it's crazy. Anyways, if you do follow me on Instagram, DM me the word coach if you'd like to know more about founder operators. And as always, guys, please leave a review. I hope you enjoyed this episode. Bit on the longer side, but I hope you find it super valuable. I hope I've saved you a lot of money and we'll speak soon.