Making Improvements to Your Business Budget!
You have successfully started your small business and should now have a good understanding on what it takes to run your own operation! Now is the time to start spending your energy focusing on areas of your budget that can be tweaked for cost saving strategies.
Business budgets vary from each enterprise but the majority of businesses will have similar core expenses such as; rent/mortgage payments, payroll, utility bills, and tax and interest payments.
Now is the time to start spending your energy focusing on areas of your budget that can be tweaked for cost saving strategies.
First, use a spreadsheet to look at your budget, take a look at the total dollar amount and percentage of your revenue needed to cover all your business necessities for the year. It may be a good idea to contact all your vendors, including your landlord, and other tax consultants. Speak with them about your upcoming bills and get an estimate of what you will owe each of them for the next year. This will give you a good idea to know how much money you need to budget for to cover all expenses.
Now for the fun part – cutting costs and tightening your budget! Since the expenses listed above fall into the necessity category, there’s not much that be done to save money in those areas. What you can do though is reassess your current spending. Take a look at the past months receipts and statements to find additional spending that doesn’t fall into the “necessity” category. These types of bills, services, or inventory may be negotiable. If you find you get a lot of bills from different suppliers or services you may need to explore other providers to see if you can get a better deal, or even consolidate some of the services.
It is also important as the business owner to make sure you are not putting too many personal expenses on the business account. These costs are probably minimal but none the less are an easy step to cutting back. It may be overwhelming but if you pay attention to where you’re spending money, where you can cut back, and renegotiate make sure to do so. Now that you are comfortable with the initial success of your business, cutting back is the first step to continual growth!