5 Financial Tips for Small Businesses Owners
This post is by Aimee Watts of mobilemoo.com
Make the most of your limited resources
Most small business owners, especially new ones, face razor-thin margins, long hours, and an endless quest to do things more efficiently. Here are a few time-tested ideas from experienced entrepreneurs to keep your operating costs low, so you have room to grow, innovate, and (occasionally) catch your breath.
1. Create a new budget
The situation of most small businesses is fluid; a 6-month-old financial plan may not account for all your incoming and outgoing. Every few weeks, update your budget to make sure it accounts for every penny of revenue and expenditure. Make sure you are taking into account your personal expenses, as many owners who don’t track their own spending can find that it becomes an invisible drain to their business. Your budget needs to be a living document, changing frequently to reflect new realities. Make a point to sit down at least quarterly and draft an updated budget for your company.
2. Avoid ego-driven growth
As a small business owner, you probably dream about making it big. Having a larger company has its benefits, but you might not be prepared for the drawbacks. Keep the operation of your business as small as you can for as long as you can, until clients and customers demand expansion. Don’t worry about expanding too quickly; as long as you’re not missing opportunities to increase your client base, stay small, agile, and responsive. If you’re in tune with your clientele, you’ll know when it’s time to expand.
3. Don’t outsource accounting
Once you get into the mode of outsourcing and utilizing the cloud for as much as possible, it’s sometimes easy to start outsourcing things you might want to keep in house. While many functions of a business are good choices to use an outside company, you really need to keep your accountant close at hand. This doesn’t have to be a full time position, or require expensive hardware. Software accounting programs from Intuit and the like run fine on a laptop or desktop PC. Having this resource close to you will help you know immediately when issues arise, and when you’re ready to expand your operations.
4. Embrace new tech
Technology is the ultimate advantage that small businesses wield over larger ones—it’s much more expensive for a big company to stay up-to-date, and the efficiency gains for small, labor-strapped small businesses are astronomical. Recent hardware and software developments like cloud computing and tablet computers have made staying technologically relevant much more affordable for smaller operations. Use cloud based services like software suites and remote storage to help you keep costs low and productivity high. Subscription based software gives you only what you need for as long as you need it and it’s always up to date. Remote hardware solutions like data storage or server management keep your local utility bills low, and reduce the need for a large IT team.
5. Consider moving
Finally as you look at your expenses when you’re crafting your new budget, consider the costs of keeping your business in your current location. Are you able to move without it affecting your current clientele? Can you reduce your office space need by allowing members of your team to telecommute? Can you rent out office space to help pay for some of your location costs? Allowing your employees to work from home decreases your cost of operating as it eliminates electricity and bandwidth usage, and theoretically increases the amount of time they’re productive (they’ll never be late again).
Aimee Watts is a staff writer for Mobile Moo. She has spent ten years telecommuting full-time, and loves spreading tips and advice for fellow work-at-home parents. She loves gadgets, new ideas, and skiing with her two favorite people: her husband and teenage son. They live in Evergreen, Colorado.