From the smallest business to the biggest multimillion-dollar international conglomerate, even the most successful businesses still have a limited budget. For a bigger company, that budget may be commensurately larger, but resources are always finite, and so it is always in the best interests of business owners to find ways to get more “bang for their buck.” This is especially true when you’re running a small business, where budgetary flexibility can be limited, and finding more efficient ways to spend your money can be the difference between success and failure in a competitive market.
Being more efficient doesn’t always just mean cutting costs. It means knowing which costs to cut, and how to cut them, as well as when to invest more in something that will pay off in savings down the road. A simple awareness of your budget—where your money is going and why—can go a long way toward helping your small business get started on the road to better financial efficiency.
There are several key places you can look to ensure that you’re getting the most from your money:
Hiring – Experts who were asked about places where most small businesses waste their money overwhelmingly mentioned hiring. But it’s not just having too many staff members. Oftentimes, it’s not having enough staff, or having the wrong people altogether that costs the company money. One key mistake a lot of small business owners make is in trying to do everything themselves. It might seem like you’re saving money but in the long run, it’s probably losing you more than it saves. Hiring someone to handle administrative work can free you up to put your valuable time and energy toward growing your business. And when you do hire someone, make sure you pay enough to get someone who’s well qualified for the job so you can keep them once you’ve got them!
Location –If you rely on customers actually coming into your store, ensuring you’re in a location that’s easy and convenient for them to reach is critical. But if you do most of your business online, or need a lot of storage or warehouse space, then your real estate dollar is probably better spent on someplace outside of major commercial areas.
Contracts – Be sure to regularly appraise any recurring contracts you have. Don’t just sign the new contract whenever it comes up for renewal. Make sure that the new contract is still serving your needs, and that your needs haven’t changed in the time since the last contract was drawn up. It can be all too easy to get into a rut and just keep doing things the way that you’ve always done them but revisiting your contracts will show you places where you can increase efficiency. The same goes for non-contracted work that you have done regularly. Whether it’s your bank, your accountant, whatever, make sure that you keep a good relationship with them, and make sure that the service that you’re receiving continues to meet your needs. If it doesn’t, then it’s time to make a change.
Technology – Advances in technology have afforded small businesses a lot of ways to increase efficiency. While some of them may require an initial investment, they often pay off in very short order. Whether it’s Skype for business meetings or a VoIP program for your office phones, new computers or tablet devices, leverage the technology that can help your business thrive and put your money toward it now so that it can start paying you back right away.
These are just a few of the ways that you can improve the economic efficiency of your small business. For more suggestions, contact Virtual BeanCounters today!
Virtual BeanCounters serves business owners and entrepreneurs with remote web and cloud-based finance applications. Let our professional accountants run your daily, weekly, or monthly bookkeeping and accounting, so you can run your business. Contact us by phone at (913) 649-1040 or click here to visit our Contact page.