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. If you control your costs, you avoid running into any monetary issues later 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.
To grow your business, you need to be prepared to spend money – but it’s crucial to recognise where your unnecessary costs can lie. Before you make a purchase, it’s important to ask yourself if you really need it. For example, if you are decorating your office space, do you really 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 actually needs - not what is being offered. It’s common for suppliers to convince you that you need more then what your business will actually use. For example, when building your website, do you really need 24/7 messenger bots or could you just focus on having all the right content on your website so that users can easily source the information they are looking for?
When ordering items for your business, ask about volume discounts. Although these aren’t always offered up front, 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 which is a perfect way to test the program and see how it will work for you and your business before making anything permanent.
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. This means that spending a few hours every now and then with an industry professional or a legal advisor can help ensure you're making the best decisions to not only help your bottom line, but make sure that you're set up for success.
Including your team in some of your spending decisions will not only make them feel like their opinion is valued, but it will help you get an understanding of areas that you may be overspending in – but haven’t noticed. Encouraging your employees to voice options that may be a better or more suitable alternative means you can cut costs on the everyday business essentials and have more money to put towards other areas. Rewarding your staff for smart spending could be a good incentive to treat them to a lunch every now and then to show them how much you appreciate their help in seeking low-cost options.
Plan to review your expenses on a regular basis so you know how your business is tracking. Most small business accounting software programs will present data on expenses including incoming and out-going costs - this is a crucial area to break down and segment where your money is going. More often than not, business owners stumble across spend areas for products or services that they aren’t even using anymore and have simply 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.