Generally speaking, businesses have two main goals; The first is to keep their customers happy by giving them what they ask for. And the second is to make a profit.
It’s possible to achieve both goals with careful planning, though, for the purposes of this post, we will be concentrating on the latter. One of the ways to ensure a profit is to limit overspending, which isn’t always easy when considering the high number of expenses that need to be managed. However, by adhering to the reasonably simple steps detailed below, it is possible to retain rather than overspend money, and reduce financial stress in the process.
Should you run your own business, these are some of the steps you can take to reduce overspending in your business.
#1: Make a budget
Unsurprisingly, this is the best way to reduce overspending. When you know how much money you have coming in and how much money you have going out, you will be able to make changes to better suit your financial position. You will have the incentive to stop spending in areas that aren’t critical for your business and you will be encouraged to follow the next point on this list and shop around to reduce your expenses.
There are hundreds of budgeting apps and tools available to you, so making a budget doesn’t have to be difficult. You can also create a budget using Google Sheets if this is preferable to you. Before too long, you will have a better handle on your finances as you will be able to use your budget to manage your weekly or monthly costs.
#2: Compare prices
Why pay more for something when you could be paying less? Especially when the product or service you receive is essentially the same, it’s pointless spending more money when you don’t need to. So, compare prices on everything, from your utilities to your office supplies. Providing you don’t end up with a bad deal (such as something that contains hidden fees in the small print), you will be financially better off.
#3: Don’t buy what you don’t need long-term
This is an obvious way to reduce overspending of course so curb the temptation to buy something that won’t add value to your business. For those items that you need on a short-term basis, such as an extra laptop or vehicle for your business, rent using a laptop rental or car hire service instead. Alternatively, come to an agreement with a partnering business if you need to borrow something.
#4: Bundle your utilities
The more services you combine, the bigger discounts you will usually net for yourself, so look for bundle deals from your utility providers. These often incorporate electricity, gas, phone, and broadband, so not only will you make savings, but you will also have fewer monthly bills to worry about. Shop around for the deals that apply to businesses and make the switch if you think you will save money each month.
#5: Review your insurance policies
Are you paying more than you need to on your insurance policies? If you are paying for cover that you don’t need, then the answer is clearly yes. Going back to a previous point, it might also be that you could be paying less if you switched to a cheaper insurer. So, check your insurance policies to make sure you have the right protection at the best price. Make the switch to another provider if you can get what you need at a lower premium or try to haggle with your current insurer before the renewal date swings around.
#6: Take on less staff
If you need to take on more staff, then fine. But the keyword here is ‘need.’ If it’s more cost-effective to outsource, perhaps for temporary projects, then resist the urge to put more people on the payroll. Not only will you have more wages to pay if you take on more hires, but there are all the other expenses to consider too, including tax, new equipment, and training. Of course, it might be that you don’t need to outsource or hire new staff. If you can shuffle some of your existing employees around, you might be able to fill any new roles that arise.
#7: Monitor your employees’ spending
It might be that you operate on frugal principles, but what about your employees? Could they be responsible for overspending in your business? We are thinking of those who operate the vehicles in your business fleet, for example, as it might be that they’re using more fuel than they should be. Then there are those who work within your office space who could be wasting paper and other stationery materials and then paying for too many replacements. Meet with your employees if you suspect there are too many money leaks and advise them on what they need to do to save money.
#8: Reduce your marketing spend
You know marketing is important for your business, but could you be paying more than you need to? You might be outsourcing to a marketing professional that is asking for more than the going rate, or you could be using expensive marketing strategies. Consider outsourcing elsewhere if you are paying too much or consider in-house marketing if you have staff members that can manage this part of your business. Then look for marketing ideas that don’t cost the earth, perhaps by using those in the linked article to market your business.
#9: Switch to cloud computing
With cloud computing, you will be able to save on expenses related to IT services, as the cloud provider will pay for ongoing software upgrades and manage any data issues. You will also be able to reduce costs in the office as if you store your files on the cloud, there will be less need for paper and associated printing expenses to consider. Check out these other benefits of cloud computing for your business.
These are just some of the ways to reduce overspending in your business. Consider each step and make any changes related to them if you haven’t already done so. Your business will profit as a result!