Money management tips for businesses

If you’re looking to save a little money when it comes to your business expenditure, here’s six quick tips to help you reduce your spending.

1. Pay attention to the detail and plan

It is always important to monitor and keep good control over your expenses and cash flow. When your business is doing well, it might be tempting to splurge on large purchases. At the same time, you may not be monitoring smaller expenses as carefully. But you need to monitor all of your expenses all of the time.

It is crucial that small business owners review their financial position every three or six months to make sure where money is coming in and where it’s going out. Based on that understanding, you then need to come up with a plan that will fine-tune your financial standing.

2. Maintain control over legal fees

There is no denying that legal fees come with a large cost. It can be one of the biggest fees a company has to pay. This is especially true if you’re a new company, if you’re being acquired from another company or you are undergoing restructuring.

Some lawyers will charge you around $500 an hour for their services. So, what are ways to maintain control over your legal fees? You need to be clear with your lawyer what your expectations are when you engage them. You also need to consider how you are being billed. At some times, it may make sense to be charged on an hourly basis. At other times, you may want to pay them on a per-project basis. You need to find lawyers who are willing to work with you according to your needs, not theirs.

3. Be mindful of your growth

The tortoise or the hare? For small businesses, it’s really going to be tortoise, with some of the owl’s wisdom thrown in. If you try to push your business to grow faster than it can handle, it could cause you and your business financial ruin and lead to your company’s demise. It is not a race. The best thing you can do is to grow wisely and at a steady pace. We can help with cashflow and business finance if you think this is right path for your growth.

4. Do your own marketing

Most small businesses don’t require a PR firm to do their marketing. Instead, do it yourself. Of course, you need to learn how to do this. You need to ensure you don’t waste money in the process and then don’t get anything in return.

Marketing involves establishing rapport with your clients or potential clients and then earning their trust. You want them to see you as a credible source of information.

Come up with a strategy and follow it. You could start a blog where you are providing targeted and relevant content. You want people to start following you, which means giving them something that will keep them interested. If you have something they have never seen before (or perhaps never seen before by anyone), it will gain their attention. And by doing this, you could gain an advantage over your competitors.

 

5. Consider your travel costs

Travel can be expensive, perhaps not as expensive as legal fees, but something to monitor. If your business involves travelling, set a budget. Figure out how much you are willing to spend and what is reasonable. When you are travelling, your expenses for accommodation, food, petrol, car rental and more can add up quickly. So make sure to do a little homework on how to travel as cheaply as possible, within reason.

6. Lease your equipment instead of buying it

For major expenses, it is a good idea to get out your calculator and excel sheet (or even ask your accountant for help). Is it wiser for your company to lease equipment or buy it outright? When you lease equipment, you have the benefit of avoiding upfront cash expenditure and you also gain possible tax benefits. You will need to do a cost-benefit analysis that takes into account your business’s individual financial circumstances.

There are other considerations than financial ones when deciding whether to purchase or lease equipment for your business. Renting equipment can also come with the benefit of not being responsible for maintenance and repairs.

This same situation can apply to real estate. If you rent your office space, you won’t have to worry about the upkeep. If you ever decided to relocate, this will certainly help with relocation costs.

If you’d like to chat over your options when it comes to business finance or equipment leasing, contact us here or call us on 1300 898 765.