To keep your business growing and profitable, it is critical that you minimise your expenditures. By spending too much on something you don’t really need, you’re leaving your business vulnerable to minor changes in cash flow. By minimising your expenses, you’ll be able to better prepare for unforeseen circumstances.
Minimising Your Small Business Expenses
It is absolutely critical as a soloist that you keep your business expenses to a minimum. This will allow you to better protect your business from unforeseen financial circumstances by allowing you save more of the profit for times of low cash flow.
Plan Your Expenses
When you’re considering any expense, decide whether or not it’s really necessary. If it is, is it necessary now, or can it wait? Will you actually get use out of it immediately, or would it be better off waiting until somewhere down the line?
This is why your business should have a budget in place. If you’ve already decided your spending limits for any given length of time, it will be much easier for you to decide if an expense is justified right now.
If you can’t find the time to put together a complete budget, or if you’re just unable to take on the task right now, you should at least form some sort of plan and a time frame for expenses on the major areas of your business.
The All Important Return on Expense
Try to figure out the return on investment (ROI) of the expense. How much money can it make for the business over the course of a certain period of time, such as a year? Does it generate income? Will it have a resale value, or no? Do you really know exactly what it will contribute to your business?
Once you’ve figured out the answers to these questions – Is it really worth the money? If so, is it worth the money right now?
If you’ve decided that the expense is justified and that you can do it right now, shop around. Take the time to check out all the different quotes, prices or sales on whatever your expense may be. Use vouchers if you can, and if negotiation is an option, always try to work out a better price for you and your business.
Make Yourself Accountable For Your Business Spending
As a soloist, you may not be held accountable for your spending. After all, the only person you have to answer to, is you. Can you discuss your expenses with a partner, accountant, business coach or your advisory board? If so, do so regularly. This will help you to identify where you’re overspending and help to find new money saving tips.
Can you find a way to get the product or service you need with paying for it? There may be borrowing, co-sharing or rental options available to you. Be sure to check these out and see if it’s a viable option.
Another great way to save money is to turn it into a game. An excellent way to do this is to compete against yourself, trying to beat your “low score” by trying to save more money each and every month. Every month you manage to save more money, you win for the month. If your space or office has unused space, you can try subletting the unused space to make back a portion of your rent (if not all or more than you spend a month).
At first, it can seem difficult to apply all of these tips to your business spending. Eventually, you will find they’ve become habit. Unnecessary expenditures could easily lead to cash flow problems in the future, and by saving as much as you can you can stop most emergencies before they happen. If you spend too much money, there’s no way you can be prepared when the time comes when you need it most.
This article was written by William from homeloanfinder.com.au. Visit the HomeLoanFinder website to compare variable home loans and home loan interest rates today.