“Beware of little expenses, a small leak will sink a great ship.” — Benjamin Franklin
Just as Franklin wisely cautioned long ago, a small business owner needs to keep a close watch on expenses.
To help you oversee where your money goes, you can use a basic spreadsheet to help you track these items, use accountant software like QuickBooks Online or others as suggested by Business News Daily, or have an accountant or certified public accountant (CPA) do it for you.
Project your cash flow so you’ll be prepared when you have more money coming in one month and not be tempted to spend the extra because you know you’ll need it for the seasonal times or predictable months when you have more expenses and less cash.
Is there a better way?
Be proactive and periodically reconsider the expenses, vendors and services you use. Sometimes, the set amounts can be improved, and, over time, you’ll see a positive improvement in your cash flow. Be smart and keep up your business and customer service standards with your cost savings.
You may be used to things as they are, but it could be as simple as thinking differently about things—for instance, phone service. Remember growing up with a landline in your home, then cell phones cam along? Now fewer people use a home phone.
Technology changes quickly. Just because the phone system and service you had when you opened your businesses is still functional, doesn’t mean it’s the best value or best equipment for your business today. Your current provider may have smarter plans or improved service that would be cost saving and more efficient for your business. Network with other business owners to find out what they’re using. Plus, be sure to shop around and check competitive service plans and options. You may be amazed at the savings a little research can turn up.
Plan ahead and renegotiate your lease for better terms, if possible. Maintain a good relationship with your landlord and it may be easier than you think. If you’re a good tenant, it may be in their interest to keep you. Or, if your business can be easily relocated, you may be able to find more affordable space in another location that’s better for your business.
Don’t forget help from your employees—and reward them for the extra effort. Some of them might be great at finding deals or they may have good ideas that could help your cash flow. Once you’re in the “is there a better way?” habit, you’ll think of more things that can help get money coming in faster.
And another way
When your efficiencies from “the better way” process are working, and savings are adding up—but just not fast enough to take advantage of an unexpected opportunity—consider growing your business with capital funding. You may need to purchase equipment, expand into new markets, or increase seasonal purchases or marketing budgets. It’s a smart solution when your business can’t wait for a traditional bank loan.
ECG understands it’s tough being a small business owner. That’s why solid financial partnerships can be the difference between a growing small business, those that just treat water and those that don’t make it. We offer capital funding to help businesses grow.
In the meantime, be encouraged by another smart thing Franklin said, “A penny saved is a penny earned.”