Counting Pennies – 5 Money Saving Tips for Your Small Business
by Arina Smith Small Business 02 November 2018
Running a small business is no easy feat – you often have to take on roles that don’t necessarily fit your job description and the majority (if not all) of the initial business budget comes out of your own pocket. Because of this, many small businesses don’t even make it through their first year of operation, which is why it’s vital to cut costs and save money wherever possible. Below, you’ll find five money saving tips to help with your newest venture.
The first thing you need to do when setting your business budget is to work out whether you can afford everything. If you can’t, but you still want to go ahead anyway, there’s no shame in asking for help. The key thing to remember is that your outlay needs to be well within your manageable margin – to ensure this, stick to small loans that have low-interest rates whenever you can instead of putting everything on your credit card.
Now that you’ve worked out what your maximum budget is, it’s time to allocate funds.
One of your biggest initial expenses is going to be the required equipment. Many people believe that the higher the price, the better the quality, but these days that simply isn’t true.
Do your research, find out what your necessities are, and then find the most economical way to acquire them. If that happens to be by purchasing some, or all, of them secondhand or refurbished, that’s perfectly fine. Just remember to be vigilant when buying used technology, since failing to make sure it’s in working order can cost you more in the long run.
Cut Unnecessary Spending:
There are certain things, such as worker’s wages, that you can’t cheap out on. Other costs, however, may not need to be as high as they are, or even exist at all.
Have a serious look at your monthly outlay and work out if there’s anywhere you can save. Even if it’s only a few dollars off each expense a month, it soon adds up, and the money you save can be reinvested back into your business.
Deducting your expenses from your budget before you allocate funds may seem like an obvious thing to do, but many people often forget to.
This can lead to unintentional overspending as it can look like you have a lot more to work with than you actually do. Once you’ve established how much your monthly expenses average out to, deduct this from your funds before scheduling things such as promotions or hiring extra staff.
By the same token as the above point, making sure your bookkeeping is handled well is essential to your business’s success. Among other critical issues, missing out even the smallest charge can seriously throw your budget out so make sure you keep organized, detailed records of all of your income and outlay.
If you struggle to manage this kind of thing yourself, hire someone. Some bookkeepers even have the skillset to double as your receptionist, administrator or greeter.
Your business is something you’ve worked hard for, literally and figuratively, and you should be proud of it. You won’t feel quite as accomplished, however, if everything consistently costs more than you budgeted for or puts you over your preferred spend.
Follow the tips outlined in this article and your finances will thank you, your satisfaction will rise, and your profits will grow each month.