What I Spend on Being Efficient


Chris Ronzio


Reviewed by


January 12, 2016

This article is Tax Professional approved


It starts off harmless. $9 a month to store all my files in the cloud? That’s cool. $20 a month for a virtual phone service? Nice! But before long, you start to get skeptical. "Another subscription service? How many of these do I need?! Not another monthly charge.”

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As a business owner, how much can you justify spending on subscription software, apps, and online services? Well, here’s what I think: bundling online subscription services is like cobbling together a super-human robot transformer employee that doesn’t take breaks, works 24 hours a day, and costs less than minimum wage. I’ll buy that all day.

Each month, I spend almost $1000 on the suite of tools that makes my business run and keeps my life in order—money I would otherwise have to spend on building a team.

Here’s the breakdown:


No doubt, it’s a lot of money for a small business to spend each month. But subscriptions have given me super powers, so I’ve become a collector.

We Live in the Sharing Economy

We live in a “pay for what you use” economy. No longer do we have to make huge investments and hope they pay off over time. Apple has a business computer leasing program so you can pay for your iMacs by the month. People trade their cars in and commute with Uber. I pay $7/hour to host client meetings in a members-only workspace in Phoenix.

With multiple plans available for different levels of use, you can take the same approach with most online services.

If you’re just starting out, chances are you can get free or close-to-free service for a few great tools, and then work your way up to the pricier packages as your business grows.

Apps and Online Services are Specialists

I’ve interviewed over 500 employees one-on-one in the last few years, and the most common complaint I hear is that most of them are “over-tasked.” Employees aim to please. They say yes. They take on responsibilities that are outside their core role. So, in time, they become generalists. They wear a lot of hats. And we pay them thousands of dollars a month for their ability to jump between tasks and tackle whatever needs to get done.

By contrast, apps and online services are entirely built on solving specialized problems. They do one thing, and they do it really, really well.

A lot of people tell me they wish there was one app that did everything, one silver bullet. There is, and they’re called employees! Rather than wishing that there was One Online Tool to Rule Them All, appreciate online tools for the narrow value that they provide.

As the owner of a small business, you are the most expensive employee. Your time is worth the most.

How Much Should You Spend on Apps and Online Services?

This is the million dollar question, one that I help small business owners answer all the time. I’ll walk you through the process I use to determine the value of a new tool below. But to be perfectly honest, how much you should spend on being efficient is incredibly subjective—it’s different for you, me, and every other business owner.

Let’s say you’re thinking about purchasing a subscription to a tool that would make you more efficient at competitor research. To determine if the cost is a good investment, start by asking yourself this question: “Would I rather spend two hours researching stuff online, or subscribe to a service that costs $15/mo and have them do it for me?”

If you value your time at more than $7.50 per hour, then it makes sense to purchase the subscription and use the tool.

You’ll need to go through this process for each of the tools and services that you subscribe to, because each of them will offer a different cost-to-time-savings ratio. The number of services that you’ll be comfortable subscribing to depends on how much net profit you consistently produce, and how much free time you desire in your life.

Many entrepreneurs run into trouble figuring this out, because they aren’t firm with how they value their time. For some entrepreneurs, their time is worth very little per hour, whereas for others, their time is worth a lot per hour. Entrepreneurs also have varying levels of risk tolerance to take on new expenses, because every new monthly expense raises the bar for how much they need to go out and earn.

If you don’t have a solid understanding of how much your time is worth per hour, this “What Is Your Time Really Worth?” calculator from Clear Thinking will walk you through the process.

Think Investment, Not Expense

It also helps to keep in mind that, in business, there’s no such thing as an expense, only investments from which you expect a certain value or return.

I was with a client earlier this week that insisted on driving two hours out to their furthest job site because “it was too expensive to send anyone else.” As the owner of a small business, you are the most expensive employee. Your time is worth the most, whether you are paying yourself for it or not.

So, don’t think about money out the door as an expense, especially money that you’re spending on services that will free up your time. Think about everything you spend as an investment. If paying $100/mo on a subscription service will free up 5 hours a month, schedule 5 hours on your calendar for calling prospects, or reading a new business book. Before long, the results of your efforts will blow away the money you’re spending, and the investment will have been well worth it.

Keep Your Subscription Costs Down

When building your toolbox of online services, the two best ways to keep your service costs down are to act early, and to share often.

The sooner you find out about a service, the better pricing you’re likely to get. I’ve spent over $2,000 on the Wufoo form builder over the last 3-4 years, but a friend of mine that signed up earlier than I did was grandfathered into a free plan. That’s money in the bank.

Keep an eye on sites like Product Hunt and TechCrunch for the newest tools, and sign up for everything that’s free. Those early-stage starter plans might not be around forever, and you have nothing to lose.

Online services also tend to have great referral or affiliate programs. If you like a service, tell everyone! You might get money off your monthly bill, or even a check in the mail.

Remember How Amazing This Is

Ten years ago I might have needed an army of employees to achieve everything I do today with a laptop and a few apps. It’s remarkable.

We’re enjoying the miracle of technology. It’s too easy for us to take this stuff for granted, since we’re getting new capabilities and online services daily.

A few years ago you had to post a job to find a bookkeeper, and now you can sign up for one while you’re waiting in line at Starbucks.

Are these apps and online services worth the money? Well, it depends on what else you’d rather be doing.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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