11 May 2022
Good morning Business Lady,
We are already half way through the week, and almost half way through the year! What have you accomplished, what have you left to accomplish, and what are you struggling with as we approach mid-year?
I always speak about business expenses as it is a very important aspect of your business that must be monitored and maintained.
There are certain business expenses you can’t avoid such as payroll, computer equipment, and utilities, but you may be losing profit by overspending without even knowing it! Businesses can often overspend in several different ways, including:
– Inconsistent Analysis
– Not creating a monthly budget
– Going over your current budget
– Wasting supplies
– Not vetting your vendors
Let’s break it down even further:
There are many opportunities to save money, but only if you commit to consistent audits. Failing to or forgetting to review your budget items could cost your business!
– Solution: Create a culture of cost reduction. Some entrepreneurs have even implemented a reward system for identifying cost-saving strategies. Small changes can add up fast.
– Assess whether you’re maximizing your physical space (if more employees are working remotely, could you reduce your office footprint to save on rent and other expenses?)
– Bundle utilities such as gas and electricity or phone and internet.
– Evaluate expenditures such as insurance rates or cell phone fees
– Ask vendors about bulk purchasing discounts.
– Reduce energy use (for example, install automatic controls for lights and temperature).
Not Creating A Budget
Budget planning allows you to make informed decisions. It helps with short-term spending such as whether you have enough money to upgrade to new software or hire a new employee — as well as saving money for the long term, securing additional funding, and paying off debt.
– Solution: No one can predict the future, But having a solid spending plan and a budget tracking system in place is a must! It’s also important to continually monitor internal profits and losses and ongoing industry trends so you can adapt accordingly.
Going Over Budget
This might happen for a few reasons, including unanticipated expenses or failure to meet earning goals.
– Solution: First, address the deficit as soon as you can to avoid long-term issues. Then, examine your businesses policies to identify where you can prevent future overspending.
Office supplies are a normal expense for businesses of every size, but there are ways to spend smarter and be more eco-friendly while you’re at it.
– Solution: There’s always some green to be saved by going green at the office. Think rechargeable batteries, refillable pens, and reusable coffee mugs.
Not Vetting Your Vendors
Selecting a vendor can be a complicated process, and sometimes businesses skip the hassle and go with the most convenient option to save time, but you might be overspending or losing out on valuable discounts and relationships.
– Solution: You can reset and find the right supplier for your unique needs. Start with an internal business analysis. Conduct a vendor search, submit a request for proposal, and carefully evaluate each company. Finally, strategically negotiate the contract to ensure it benefits your business.
Every business exists to generate a profit and be successful in the long run. Why else are we putting in such long hours if not to achieve our goals? Not only will implementing these steps save your company, but it will also teach you and your team about management, control and consistency.
Til next time,