Growing your small business is a difficult and time-consuming process. Not only will you need to get good at acquiring new customers, you also need to focus on keeping your business financially healthy. Ignoring the need for things like a budget can result in lots of financial problems in the future. In this article we give you 5 Quick Ways to Cut Down on Your Monthly Business Expenses.
A recent study found that over 61% of small businesses didn’t create a budget last year. If you are tired of flying by the seat of your pants financially, it is time to get more disciplined.
Once you have a detailed budget in place, start looking for ways to reduce the amount of money you spend each month. With some elbow grease and thorough research, finding ways to cut down on your monthly expenses will be a breeze. Consider the following tips when trying to save money on monthly operating expenses.
1. Review Your Existing Financial and Lending Solutions
Running a modern business requires the use of the latest technology. As a business owner, you need to make sure that customers all over the world can find and buy your products/services. Accomplishing this goal will require the use of the internet and financial technology.
Finding modern banking solutions, restructuring your loans and looking for hidden transaction fees can help you save a lot of money. When trying to optimize the existing lending and financial solutions you have in place, you need to think about a few factors.
Are You Working With the Right Bank?
The ability to process online payments or pay bills digitally is something many business owners take for granted. If you are still using paper invoices and don’t have the ability to accept online payments, it is time to make a change.
Modern consumers want to deal with companies that have no problem taking any form of payment they offer. Financial institutions like Amaiz provide business owners with the payment flexibility and low fees they want. Contact a member of the team at Amaiz to find out more about the banking solutions they provide.
Loan Interest Can Be Costly
When first starting a business, most people are extremely strapped for cash. If you need a little financial boost to get your venture to the next level, taking out a loan is usually a good idea. However, if your business is unestablished, you run the risk of paying higher than normal interest rates. As time goes by and your business starts to grow financially, you need to take a second look at your existing loans.
In some cases, you can refinance these loans with lower interest rates. Lower interest rates mean that you will have a lower monthly payment. With the help of an experienced and reputable lender, you can get the lower interest rates and flexible refinancing terms you are after.
2. Make Your Business Environmentally Friendly
Many of the new businesses started in the United States each year are home-based. The longer your business is open, the more of a need you will have for additional room. Renting or buying office space is a great way to facilitate new growth. Finding ways to conserve energy in your new building is not only good for the environment, it is also beneficial for your bank account.
Check for Drafty Windows and Doors
Hiring professionals to perform an energy audit is a great way to find out where problems exist in your building. When performing this audit, professionals will spend a lot of time inspecting the doors and windows. If the doors and windows in a building are old and drafty, they will allow a lot of air to escape.
If all of the air produced by your commercial HVAC unit is escaping through windows and doors, it will increase the cost of your monthly energy bill. Paying to have these outdated windows and doors replaced is the best way to address this issue quickly. Investing in energy-efficient windows will allow you to save a lot of money over time.
Replace Outdated Office Equipment
Having the latest technology and equipment in place for your team is essential when trying to increase productivity levels. If your workspace is filled with old equipment, it is probably using a lot of electricity. Outdated fax machines, computers and copiers will waste energy.
While you will have to pay to replace these pieces of equipment, it is worth it. Over time, new office equipment will save you money.
3. Eliminate Inventory Waste
Selling products to the general public can be quite lucrative. However, you will need a lot of inventory to avoid losing customers. Some business owners allow their need for more items to get in the way of sound inventory management practices.
Spending money on items that you don’t really need can end up bankrupting your business. This is why getting a handle on your inventory waste issues is crucial.
Track Every Sale
Inexperienced business owners fail to realize how hard it can be to manage inventory without the use of technology. Keeping manual logs of the items your company sells will result in a lot of mistakes being made. Instead of relying on this outdated form of inventory management, you need to make a change.
Investing in inventory tracking and management software allows you to take control of your business in new ways. By knowing how many times a product is sold in a given period of time, you can estimate the need for it later on. This means you can avoid ordering too much inventory and wasting money.
Routine Inventory Audits are Necessary
Even after you get new inventory management software in place, you will have to manually audit your warehouse routinely. By physically verifying you have the right amount of stock on hand, you can avoid problems with customers ordering things that aren’t in your warehouse.
If you don’t have the time or experience needed to perform this audit, think about hiring professionals. With this professional help, you can rest assured that your inventory is accurate.
4. Consider Using Remote Working Solutions
Having the right team in place can help to increase your chances of success. During the quarantine brought on by COVID-19, business owners and employees have learned more about remote working possibilities. Using remote working is a great way to save money.
Embracing the remote working trend will not be easy. You will need to work on getting the right equipment in place before hiring a remote team of employees.
Looking For the Best Deal on Cloud Computing Solutions
Before you start reaping the benefits of using remote workers, you need to get the right IT infrastructure in place. Making your network and the files on it accessible to new employees is possible with the help of the cloud. Before choosing a cloud service provider, consider what each of them has to offer.
For instance, you need to make sure the third-party cloud solutions you use are secure. The last thing you want is for sensitive information to be stolen due to a lack of encryption or other cyber-security mistakes. With some research, finding a great deal of cloud services that are easy to use and secure will be easy.
Avoid the Stress of a High Turnover Rate
Hiring and training new employees can be both time-consuming and expensive. This is why you need to focus on keeping your existing remote employees happy. Investing in top-notch technology and offering competitive pay is a great way to improve employee loyalty.
The money invested in employee happiness will be worth it considering the problems it can help you avoid in the long run. A satisfied employee will give you all they have and will be thankful for their job.
5. Take A Look At All Expenses
Reviewing your monthly budget is imperative when trying to reduce operating costs. Ignoring the need for budget reviews can result in you spending a lot of money on foolish things. Working with an accountant is a great way to ensure financial problems are caught and fixed in a hurry.
Check Your Recurring Payments
Signing up for a free trial and forgetting to cancel it is a pretty common occurrence. Allowing these recurring payments to stay in place after you are done with the product/service can cost your business a lot of money.
Taking the time to review all of the recurring payments coming out of your business bank account is a wise move. You may be surprised to learn just how much money is being wasted.
Getting the Best Deal From Outside Vendors
Do you have a number of third-party vendors and suppliers you are issuing payments to monthly? If you answered yes, now is the time to check around to ensure you are getting the best possible deal.
If you do find a better deal from another vendor, be sure to give the existing vendor a chance to match the offer. In some cases, this price matching will help you avoid the aggravation of switching vendors while still saving money.
Applying the Tips You Have Read
We hope these 5 Quick Ways to Cut Down on Your Monthly Business Expenses have been helpful. Now that you have an idea of how to save money on monthly business expenses, it’s time to get to work. With some hard work and professional assistance, you can adequately cut costs.
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Ashley Lipman is an award-winning writer who discovered her passion for providing knowledge to readers worldwide on topics closest to her heart – all things digital. Since her first high school award in Creative Writing, she continues to deliver awesome content through various niches touching the digital sphere.
Also published on Medium.