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Welcome back to this week’s episode of the podcast. Today, I am sharing a powerful exercise will help you uncover money inside your business that you didn’t even know was there.

Are you ready? Let’s dive in.

As business owners, we often put a lot of energy into signing that next client and there’s always some cost involved—whether it’s money or time. Getting clients requires you to go out and do something, you need to put in the effort to bring them into your world, and even if you gained clients through referrals, you still had to provide those clients who referred you an amazing service, otherwise they wouldn’t refer you to their friends. We’re constantly focused on driving that next sale, and rightly so! If we want to stay in business, we need customers, we need to generate revenue.

But here’s what we don’t always think about: How much money is quietly slipping through the cracks? Money that’s leaking out of your business without you even noticing?

What if, instead of only focusing on bringing in new clients, we started by plugging those leaks? That’s what this exercise is all about—recapturing the money that’s escaping, leaking out, and putting it to better use.

The first time you do this exercise, you might be surprised to find thousands of rands hidden in your business. As you do it more regularly, the amount may be smaller, but it’s a crucial habit to build.

Here’s why:

Running a business involves risk. You have the risk of spending money on marketing and not seeing a return. There’s always a chance that a customer might ask for a refund or that you’ll spend resources on a product or service that doesn’t sell. If you deliver a poor service you risk a bad review that negatively impacts your brand reputation. While risk is a normal part of running a business, we want to reduce and manage the risks we do take on as much as possible. One of the ways in which we can easily reduce risk is by keeping our expenses as low as possible without sacrificing the quality of our services. The recapture exercise is all about managing what we have better. Putting the money that is already there to better use.

The leaner we can keep our spending, the more cash we’ll have available, which allows us to absorb or reduce the impact of other risks. We want to make sure that we’re spending money on things that actually generate a return for the business. Unless you have a strong recurring revenue stream coming into your business, for most of us, our revenue is always fluctuating. It doesn’t go up in a straight line. Some months we have more sales coming in and other months we have less. So growth isn’t linear. If we don’t manage our risk as we grow, we can quickly get ourselves into a position where the amount of risk we’ve taken on far outpaced the growth we made. Which means that it takes only one blow for the house of cards to tumble.

These days, almost every software or platform you use today has a monthly subscription. A pro version that gives you access to features that aren’t available on the free version. It’s way easier to just pay the R100 per month for the extra google storage space than it is to spend some time sorting out your files. Sometimes we sign up for a trial, put in our card details, forget to cancel and then we’re hit with an annual subscription charge a year later. We’ve all signed up for things we ended up never using. So while I’m not suggesting you give up on automation that truly saves you time, we need to be smart about it.

The Recapture Exercise

Now, let’s get into the recapture exercise and stay tuned to find out how much I managed to recapture inside my own business. 

Step 1: Print out 12 months of your bank statements. We don’t just want to look at the last three months because we don’t want to miss those annual subscriptions we may have forgotten about. 

Step 2: Go through your expenses month by month and identify any recurring expenses. You can capture them in an excel or google spreadsheet as you identify them.

Step 3: For each recurring expense, ask yourself: Does this bring a return to my business? If the answer is no—or even a hesitant maybe—it’s time to reassess whether it’s truly necessary. 

Step 4: Stop or cancel anything that doesn’t bring a return. This is the most uncomfortable part. And this is where you want to be okay with feeling the discomfort. If down the road you realise you do need that service or software, you can always add it back. But nine times out of ten, you won’t. It’s way harder for us to opt out of things than it is to opt in. And if we have spent money on it then it’s even harder. We place more value on things when we’ve paid for it.

When I did this exercise in my own business, I found R140,000 just leaking out—money that wasn’t giving me any return.  50% profit margin, that’s the equivalent of making R280,000 in new sales. And these were recurring expenses, that’s 140k per year that would have just been wasted year after year. Imagine what you could do with an extra quarter of a million rand just by plugging those leaks.

And here’s the eye-opener for me: I was so focused on signing more clients, but this exercise showed me that chasing new sales while allowing money to leak out is the definition of inefficiency. It’s like filling a bucket with water while there’s a big hole in the bottom. Sure, you can keep adding water, but wouldn’t it be easier to fix the hole first?

By plugging these leaks, I managed my risk. I didn’t need to go after new clients to find that R280,000. I plugged the whole first. So now, when I do bring in more clients, I’m doing it from a position that is more secure and has less risk involved.

Your actionable takeaway

Set aside some time to do this Recapture Exercise for your own business. Go through those expenses, cut the ones that aren’t serving you, and see how much money you can recapture. Do this regularly and get into the habit of keeping things lean.

And I’d love to hear from you—send me a message on Facebook or Instagram and let me know how much you found! You might be amazed at what’s been hiding in plain sight all along.

Do you have a question on designing a business that can run smoothly with or without you?

Send me an email at ilonka@ilonkaras.com and I will answer it in the next episode.

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