While your personal bank account may see-saw wildly from being in the black to being in the red, when it comes to your business finances, you need to look closely at your financial habits – because a business can only thrive if you keep a careful eye on your budget.
Beware the Unneeded BOGOF
Bulk buying often makes sense for businesses – but only if the saving is significant, there is room in the budget, and those extra products will actually be used in the near future.
Don’t get carried away. Technology is moving rapidly, so don’t invest in extra software licences for staff you don’t have yet because there’s an offer on them, and don’t buy everyone something that in reality, two or three people could easily share.
Those sixty boxes of printer paper will take up storage room, and if it takes ten years to get to box number 60 over there by the draughty back door, there’s a good chance that the paper will be far from its best – as you’ll find out, when its cold damp surface wrecks your copier or printer…
Invest Time to Reap Financial Rewards
When was the last time you checked your energy contract to see how much you’re paying –and if you’re on the best deal? The provisional findings of a report by the CMA revealed that in 2013, 45% of micro businesses were on default electricity tariffs, while a study by SwitchMyBusiness.com showed that just over a quarter of SMEs didn’t know how to go about terminating their current energy contract, 18.4% of businesses had been automatically rolled over onto a new contract without their permission, and a stunning 16% didn’t know whether they had been a victim of auto-renewal.
Invest time in checking the prices and terms of your current contracts energy use, landline, business mobile, broadband, photocopier rental and/or maintenance, IT support and anything else you pay for monthly, yearly or quarterly without a second thought. Jot down the key facts and then go shopping. It needn’t be an overwhelming task – tackle one cost at a time (although phone and broadband costs are usually better looked at together, as are gas and electricity if applicable, as some combined deals are cheaper). This should reduce your regular outgoings, leaving you more money in the budget for growth.
If you moan at the kids for leaving the lights on at home and then commit similar crimes against polar bears yourself when at the office, shame on you. Does the copier really need to be on all day? Are you and any workers you employ fastidious about switching off computers when they leave for lunch or go home in the evening, and turning off lights in rooms they’re not currently using? Forget that old myth about light bulbs costing more to switch on again than leave on, because that’s exactly what it is; a myth.
According to the Carbon Trust, the average SME wastes around £350 every year by leaving hardware on standby. Ouch.
No Man (Or Woman) is an Island
If you know your strengths, weaknesses and time limits, you will recognise when you need help to fill the gaps. But this doesn’t have to mean employing someone full-time, or even employing someone at all. Investigate all the options; freelancers, contractors, agencies and professional services such as book-keeping and accountancy can all offer the skills you need, just when you need them. These days, many tasks don’t require a physical presence in the office, allowing you to employ someone hundreds of miles away to work for you remotely via the internet without buying them an office chair or that blue stapler they covet.
With a clear idea of the hourly rate you’re paying, you can calculate how many hours you can buy within into your budget.
Look for Free Rides
You would be amazed at what you can get for free if you really look. Sign up for updates and offers where you can; everything from mentoring to software can be found for free if you look hard enough and keep yourself in all the loops. Local business partnerships and authorities may offer or fund anything from networking sessions, courses, grants and financial advice to business cards and websites.
Ignore the Image
Value brands aren’t always good value but you shouldn’t avoid them on principle, either. Equally, big name brands don’t always equal high quality. Keep an open mind and try to sample and compare products, whether it’s printer paper or pods for the coffee machine, and only spend money where it matters.
Why not invest in your business right now by taking ten minutes to consider how our tips could make the budget stretch further in your business?
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About The Author
We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!