Starting a business comes with its challenges, but maintaining business success well that’s the really difficult part. One major impact that hinders the success of a business is the amount of money that’s spent over the financial year. Spend too much and you’ll risk bankrupting your company. So to make sure that doesn’t happen, here are five ways you can save on your business expenses.
Be Strict With Your Budget
Budgeting is something that all businesses need to do in order not to overspend. Many small business owners don’t keep track of how all of the money is being spent. For example, the supplies you buy and the trips you make to deliver products and services are often not accounted for. When it comes to larger companies, budgeting gets more difficult with the more departments that you have. Each department will have its own needs wanting to allocate money toward projects and any expenses.
Ideally, you want to sit down with your finance team at the start of a new financial year to discuss the budget allocations and who gets what. It’s useful to look back on your previous year and assess your spending patterns. You will also need to see what profits were made so you can estimate what you will make in the upcoming year. You can then create a budget that will incorporate prior cost savings and potential new ones.
Take time to get input from department heads to make sure you’re providing them with the resources they need as best you can. It’s also a good opportunity to see what they need in terms of budgets going forward. If you can’t provide something they need this year, it’s worth planning ahead and looking into the following year. It’s also good to identify an amount for a reserve pool. This way funds will be available if as a backup if there is an unexpected expense or should anything go wrong.
Having a budget and sticking to it, will help you identify where your money is going and where you can identify cost savings. You may find you have purchasing items you really don’t need and money could be better spent elsewhere.
Consider Any Further Staffing
Staffing can make up for a large amount of your business expenses each month. This doesn’t include all of the additional expenses that come with having a staff. When you add a staff member to the team, it costs money. It might be worth considering whether further staffing might be needed and whether the current staff you have could do the work. You’ll end up saving a lot more if you can promote or increase an employees workload. In return, you can give them a bonus or raise in salary.
The more staff you employ, the larger the costs will be. Make sure you can support your current staff needs before hiring anymore. You also want to have staff members who are truly going to be an asset to the company. Be wise in your recruitment and take time to find the right fit for the team.
The other option is to consider outsourcing some of the tasks that need to be done. This option doesn’t require you to hire full-time staff. Instead, you can pick and choose between contracted work and freelancers who’ll come in for just the hours you need, rather than working whole days. An area many businesses consider is outsourced payroll services.
Save Time With Technology
Technology has impacted companies in leaps and bounds over the last ten years. There is a great deal of software and systems available that save companies time and money. There’s also free collaboration tools that can replace expensive software that you might have in place, such as Google Docs and Google Sheets. Both are free and enable more than one person to work on a document at once.
Cut Down On Office Space and Building Costs
Running an office is a costly expense and whether you have a small office or a big one. Location matters as well. Having an office in the city can be a huge loss of profit in business. In order to cut down on costs, you might want to consider how much you spend on your office space. Think about the bills that are paid in terms of utilities – gas, electric and water. See if you can find cheaper alternatives and go with energy providers who can offer better rates then you currently pay.
Don’t forget the cost of office supplies. Stationary costs can be significant. It’s beneficial to find cost-effective ways of reducing this weekly or monthly bill. Perhaps switching to paperless and saving files digitally rather than printing them off can be useful. Not to mention it’s also good for the environment. Not only will you save money, but you’ll also be doing your part as a business to be more eco-friendly.
Also, be strict with office requests. While it’s important to make sure employees are happy, it can become quite costly if staff start asking for standing desks and ergonomic chairs that cost hundreds of dollars. It’s worth allocating a budget to make sure this doesn’t go too overboard. However, if it is to accommodate a disability a staff member may have, you really want to provide what is needed if possible.
Offer Flexible Working Hours and Spaces
Flexible working hours and spaces are what a lot of businesses are trying out with their staff. This will allow for more flexibility around their own lives. It’s working towards a work-life balance that a lot of us are likely to desire. With technology being what it is now, working remotely from home or on the go is a lot more manageable than it once was. That’s why businesses are now more inclined to offer flexible working. Not only does it assist employees with work-life balance, but flexible working can also have an impact when it comes to saving money.
Less staff in the office means you reduce the costs of running an office significantly. Fewer stations will be powered up and overall daily tasks such as printing, boiling kettles and using microwaves/ovens for lunches will also be reduced. If this is happening a few times a week, imagine the savings that could be made.
Of course, flexible working doesn’t work for every business, but if it’s something that your business could offer to at least some members of staff, it’s worth trying out.
All businesses can save money, it’s just making sure you set a budget and stick to it and you look at alternative ways of working, like flexible working to save money over the long term. Give these a try and see how you reduce your business expenses this year. Here’s to YOUR success!
Carolyn R. Owens has over 25 years of proven experience and serves as a Career Strategist, Leadership and Life Coach. She is the Chairwoman and CEO of Infinity Coaching, Inc. where they help you up-level your skills so you can up-level your income. Infinity Coaching, Inc. provides one-on-one and group coaching, organizational training, and personality assessments. Carolyn is certified to give both The Energy Leadership Index Assessment and Myers Briggs Type Indicator (MBTI) Assessment. You can find out more about both assessments and other products and services athttps://www.infinitycoaching.net.