ZAM

Kill Recurring Costs

Practical steps to reduce recurring costs in your business

I've spent years helping owner-operators like myself identify and eliminate unnecessary recurring costs in their businesses. As the founder of ZAM, I've seen firsthand how these costs can quietly drain a company's resources, hindering growth and profitability. In this essay, I'll share my experience and provide a practical playbook for killing recurring costs and taking control of your business's financial future.

Understanding the Problem

The first step in addressing recurring costs is to understand where they're coming from. For many businesses, the biggest culprit is rented SaaS tools. These tools often come with monthly or annual subscription fees that can add up quickly, especially if you're using multiple tools to manage different aspects of your business. I've seen businesses using 21 SaaS tools or more, with each one requiring a separate subscription and setup process.

The problem with rented SaaS tools is that they're often generic and don't perfectly fit your business's unique needs. This means you end up paying for features you don't use, and you may even need to hire additional staff to manage and integrate these tools. By owning your software and building it around how you actually work, you can eliminate many of these unnecessary costs and create a more streamlined, efficient operation.

Auditing Your Business

To start killing recurring costs, you need to audit your business and identify areas where you can improve efficiency and reduce waste. This involves taking a close look at your current systems, processes, and tools, and determining which ones are truly essential to your operation. I recommend starting with a thorough review of your SaaS tools and subscriptions, and asking yourself which ones you can eliminate or replace with custom-built solutions.

  • Review your SaaS tools and subscriptions
  • Identify areas where you can improve efficiency and reduce waste
  • Determine which tools and processes are truly essential to your operation

As you audit your business, you may be surprised at how many opportunities you find to reduce recurring costs. From streamlining your supply chain to automating routine tasks, there are often many ways to simplify and optimize your operations. By taking a careful and nuanced approach to this process, you can create a more sustainable, cost-effective business model that sets you up for long-term success.

Building a Custom Solution

Once you've identified areas where you can improve efficiency and reduce waste, it's time to start building a custom solution that meets your business's unique needs. This may involve working with a developer or development team to create custom software that integrates with your existing systems and processes. By owning your software and building it around how you actually work, you can eliminate many of the recurring costs associated with rented SaaS tools and create a more streamlined, efficient operation.

I've seen this approach work firsthand with one of my clients, a ~200-employee owner-operated business that was able to replace 21 SaaS tools with a custom-built solution. The result was a significant reduction in recurring costs, with $0 ongoing cost for the new system. This not only saved the business money but also improved efficiency and productivity, allowing them to focus on growth and innovation rather than just maintaining the status quo.

Adding AI and Automation

In addition to building a custom solution, you can also use AI and automation to reduce recurring costs and improve efficiency. By automating routine tasks and leveraging AI-powered tools, you can free up staff to focus on higher-value work and reduce the need for manual labor. I've seen businesses use 25+ AI agents to automate tasks and improve operations, resulting in significant cost savings and productivity gains.

The key to successfully implementing AI and automation is to identify areas where they can add the most value, and to carefully evaluate the costs and benefits of each solution. By taking a thoughtful and strategic approach to AI and automation, you can create a more efficient, cost-effective operation that sets you up for long-term success.

In conclusion, killing recurring costs requires a careful and nuanced approach that involves auditing your business, building a custom solution, and adding AI and automation where they can add the most value. By following these steps and taking a thoughtful, strategic approach to cost reduction, you can create a more sustainable, cost-effective business model that sets you up for long-term success.