There’s always room for improvement! Even successful businesses are always on the lookout for ways to reduce costs and reinvest more money. That’s why as a small business owner, you need to know exactly where and how your money is being spent. You may find that restructuring your budget is necessary to help your veteran-owned small business reach its goals. Consider these six simple ways to revamp your small business budget and work your way towards financial freedom!
1. Keep Budgeting Flexible
A great place to start is ensuring that your budget is flexible. Rigid budgets may not be useful for a small business- things are bound to change as the years go by, and it’s a good idea to factor in the anticipated changes and how they’ll possibly affect your spend. Over-relying on the best guess that worked several months ago may lead to erroneous and costly decisions. Additionally, holding your staff to metrics that are based on outdated information can be frustrating and counterproductive. Flexible budgets and goals will enable less stress and better results for your small business.
2. Review Financial History Reports
Financial history reports are an excellent source of information concerning your costs. Take time to go through your accounting system. Ideally, it should be well equipped with historical information about your business expenditures. Review how you’ve been spending your money. Check both monthly and yearly costs to gain a good grasp of your business expenditures and spending patterns.
You might discover that you’ve been focusing on sectors that have not been bringing in expected returns. Insights like that will give you the information you need to know where to cut costs and where to pump in more cash.
3. Keep Track Of Government Taxes And IncentivesYou can also keep an eye open for the latest tax credits and government incentives that can save your business some money. For example, the Work Opportunity Tax Credit (WOTC) offers a tax credit for employers who hire and retain people from targeted groups that have continually faced significant barriers to access employment. Credits like this can save your business thousands of dollars!
4. Use Technology
There are always new programs and gadgets hitting the market, and some can play a huge role in cutting down on business costs. Cloud-based HR, accounting, and marketing tools can save your business both money and time. Savvy use of social media can offer you free advertising and marketing platforms courtesy of your clients who share their purchases and experiences. Video conferencing tools put you face-to-face with clients and could potentially cut travel costs to attend business meetings. There are a world of technological tools at your disposal that you could use to help you keep spend down!
5. Examine Your Marketing Strategy
Marketing is something that both small and large businesses should heavily invest in. Examineyour current marketing to learn exactly what’s working and bringing a good return on investment. Equally important is to identify what’s not working for your business. Expand upon what works and let go of what doesn’t- this way you eliminate ineffective and even potentially business-stifling marketing efforts and therefore cut the costs associated with it.
6. Use Pooling Power
Pooling power could help you gain leverage for better prices. How? First, you need to seek like-minded companies that share a supplier. Then, you pool your resources and create a combined purchasing power that will help you all access some savings. From there, with an agreed purchasing price, you collectively tell the supplier that you’ll buy a certain amount of their product for a pre-set duration. Offers like this tend to work because it provides not only large revenues for the supplier, but also a consistent client base for a set duration.
Any of these six ideas could effectively reshape your business’ budget. With that said, there’s no quick fix and every business is unique. The most important thing you need to do is closely examine your financial situation and be prepared to make changes. If, over a period of time, you discover areas that require improvements, you need to act!
If you’ve reinvented your budget and you find your small business still needs a little more to meet your goals, consider small business financing. We take a deeper dive into the topic in this free ebook, “The Basics of Small Business Financing.” Download it today to learn more about how to apply for a small business loan, how to open a business line of credit, or how to acquire government contract financing.
This communication is provided for informational purposes only. It is not intended to be an advertisement, a solicitation, or constitute professional advice, including legal, financial, or tax advice, nor is StreetShares providing advice on any particular situation.