It's a simple fact of business that to make money, you must spend it – but watching where exactly you are spending that money is a constant balancing act. Controlling your cost helps you to avoid running into any monetary issues down the track, but hold back too much, and you'll hinder the growth of your business. To help you balance this, we've come up with 5 tips.
1. Think Simple
To grow your business, you need to be prepared to spend money – but it is crucial to recognise where your unnecessary costs can lie. Before you make a purchase, ask yourself if you really need it. For example, if you are decorating your office space, do you need to go all out or could you achieve a similar look and feel with just a few simple touches?
When purchasing services, focus on what your business needs - not what is being offered. For example, when building your website, are 24/7 messenger bots necessary? Or would it be enough to focus on your website content so users can quickly source the information they need?
2. Do Your Research
When ordering items for your business, ask about volume discounts. Although these aren't always offered upfront, you may be surprised at how many suppliers would be willing to knock the price down a bit to get the sale. The same goes when buying subscription plans for computer programs – but take into account how quickly your business needs may change as you grow. There's no point signing up for a yearly subscription for a program if you're more than likely going to out-grow it in 6 months. Most programs will offer free trials, allowing you to test the program to see how it will work for your business before making anything permanent.
3. Trust the Experts
Having your own business can be daunting and includes a lot of learning as you go, so if you need help, don't be afraid to ask. Many programs offer online help on the services they provide, which is great in the short term but may cost you in the long run. Spending a few hours every now and then with an industry professional or advisor can help ensure you're making the best decisions for your bottom line, and also set you up for future success.
4. Encourage Smart Spending
Including your team in some of your spending decisions will make them feel like their opinion is valued and put an onus on their spending habits. Encourage employees to voice options that could be more suitable alternative cost-cutting options on everyday business essentials. Rewarding your staff for smart spending could be a good incentive to treat them to lunch now and then to show them how much you appreciate their help in seeking low-cost options.
5. Review Expenses Regularly
Review your expenses regularly, so you know how your business is tracking. Most small business accounting software programs will present data on expenses, including incoming and outgoing costs. This is a crucial area to break down and segment where your money is going. Often, business owners stumble across spend areas for products or services that they aren't even using anymore and have overlooked or forgotten to cancel the subscription.
Using these 5 steps to control your business costs will help you set yourself up for success and keep on top of any spend areas that may be unnecessary. Time is money and planning ahead means that you can focus on where your business can grow, rather than areas that are hindering it from doing so.