As a small business owner, I am perfectly okay confessing that I am sometimes horrible at business finance. It isn’t that I don’t know how to do my business budget or that I’m not good at doing it, I just hate it and as a result, I tend to procrastinate with it as long as possible. What I am great at doing though is saving money in my business budget. The simple fact is that I don’t like spending money unless I have to. Being a business owner can be hard enough without adding money worries from huge expenses on top of the other stresses that come with it.
Knowing what is going on with your business budget is especially important if you’re trying to stop living paycheck to paycheck but aren’t having much luck. For my family, our family budget and our business budget ran together for so long that it was incredibly hard to separate the two. Eventually though we realized that we needed to take a step back and separate our business finance from our personal finances. For me, that process began with finding ways to save money in my business budget the same way that I did in our personal budget.
Business Finance – 10 Ways to Save Money in Your Business Budget
Saving money in business finance situations isn’t the same as saving money in a personal finance situation. The expenses are different, the payment methods are usually different and your business budget in general will be different than your personal budget. Even the way they are set up may be different. The same principle does apply though; if you’re looking to save money, you’re going to have to work for it. Whether you’re looking to save in your business budget or your personal budget does not matter.
Work smarter not harder –
The world of social media has changed over the years, but truth be told, it is still the best “free” way to market your business. The catch is that you need to be smart about how you’re managing your social media accounts. If you just go in and start randomly posting, you’re not going to get very far. If your business does a lot of social media promotion, use companies such as BoardBooster and Tailwind for Pinterest and Co-Schedule for Twitter, Facebook and Google Plus, you’ll get considerably farther. If you’re a writer who struggles with grammar , paying for Grammarly can help. If you’re an Amazon FBA business, companies like Inventory Lab or TaxJar can make things easier. Spending money on things that make your business life easier isn’t a waste. Yes, you’ll be spending money, but that money spent will help you make so much more. In addition, you’ll need an email list as well. This gives you the ability to reach out to your clients or customers directly instead of having to beg for them to come to you. Companies like ConvertKit are amazing for managing your email lists and really can help you work smarter than you ever have before.
Know when to pay for something…and when not to –
Business owners have a tendency to do two things; to take on too much and to want to do it all themselves. The simple truth is that you can’t do it all. If you try to do everything yourself, you’ll very likely burn out and you’ll do it with a quickness. A burnt out business owner is one who can’t give their business the attention it needs and by default, isn’t earning as much as they could be. On the other hand, if you hire too much out, you’ll end up blowing your business budget just as quickly. Take a look at your business expenses and scale them down if you’re spending too much. When you’re going through them, really consider whether you truly need to pay for that item or service or whether you can let it go. If you don’t currently have any expenses, take a look at what you feel overwhelmed doing and consider paying to take that load off.
Be sure your budget categories are correct –
One of the biggest ways to damage both a family budget and a business budget is with either missing budget categories or incorrect ones. Take the time now, before your budget is in trouble, to fix any issues you have with your current categories. Doing this before your business budget is in trouble or before the end of the year looms, will save you quite a bit of heartache later on.
Keep your books up to date –
This is one that I will freely admit I am bad at. For me, I simply don’t make the time to do it until I’m down to the wire on having to have it done. You and I both could save quite a bit of money in our business budget by making sure that our books are up to date. This means doing them weekly or bi-weekly at the very least for me, but for you, once a month may be enough. You’ll also want to make sure that you are using an accounting software that is easy to use. Freshbooks is one of the easiest accounting softwares to manage that I have found and trust me, I’ve tried a lot of them. Another great one is Quickbooks Self Employed. Not only does it work incredibly well, but it is also incredibly budget friendly too.
Know that you have to spend money to make money –
I can’t think of a single business that you can grow successfully for free. It is quite the opposite actually. You have to spend money to make money and a smart business owner will realize this. This means that whether you’re doing business finance projects or you’re simply doing your business budget at the beginning of the month, you need to budget for any and all expenses that you absolutely need. Not only that, but you need to account for emergency situations too. Your business will not thrive if you don’t have money put back into it for them. Things like computers that suddenly go ka-put, a company vehicle that needs an emergency repair or any other sudden pop-up expense can really bring a business budget to its knees if you’re not prepared.
Use only what you need –
While you must spend money to make money, it can also be incredibly easy to get caught up in spending just for the sake of spending. Each time that you do your business budget, make sure that you’re going through it and removing anything that is there just for the sake of being there. You might be surprised at just how much money you’re wasting each month by spending on something that you don’t need and that isn’t giving you any value.
I cannot tell you how important building relationships is to any business. People will remember those who make an effort to remember them. Find out what your customers want by building relationships with them. The value of a company greatly deteriorates when customer service is not a priority. Also, Reach out to others who are in the same business as you. Get to know them and not simply for what they can do for you. Marketing your business can get expensive so you should always be on the lookout for opportunities to network for free. Get involved in community programs, network meetings, and free events where you can showcase your business without the added cost.
Hire a Freelancer instead of taking on employees –
Simply put, employees are a huge commitment and for someone who is running a company from their garage, working as a professional blogger or has a business budget that doesn’t have a lot of wiggle room in it, they can be too much to handle most of the time. Not only do you have the commitment of paying them no matter what your budget looks like, but there are also much stricter bookkeeping requirements for an employee. You must take taxes out for them which requires additional bookkeeping costs. You must do payroll for them which results in additional costs. You must provide health care if they’re full time which again, is additional costs. Instead, keep your costs down by hiring a freelance independent contractor. You will generally pay them one time and be done with it.
Work from Home –
Working from an office is costly when you are a small business. It’s just isn’t cost effective to work out of an office that you pay rent, utilities, and internet for, especially when you take into account the tax deductions that having a home office can provide. Not only that, but you also have less costs in gasoline and wear and tear on your car. I have worked from home as a professional blogger for almost 6 years and I wouldn’t have it any other way.
Barter with others –
I love to barter and in business, it is just plain smart to do when you can. Bartering has become a lost artform but can save you a massive amount of money not only in your business budget but your family budget as well. You can barter services for services, social network promotion, email promotion even things like writing for something else that you need done. When it comes to bartering, you may be told no, but the truth is that you will never know until you ask.
Be good to your employees or contractors –
Finally and I’m going to put this out there in a really short and sweet kind of way. You may own and manage your business but you would be nowhere without two things: the first is your clients and customers and I am sure you know that. The second is the very people who help you. Be good to your employees or contractors and they will be good to you. When they’re good to you? They do their best work and help you grow your business in ways like you’ve never imagined.
Looking for more info on creating your business budget or business finance? Check out my favorite books on business finance!
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