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The world of business is not a comfortable place to be. The job of a small business owner is hard, but it is often a dream some people aspire to. And, that is why most go after it. Every potential business owner wants to know what success looks like. It is why your goal is to make money. A lot of money.
But, for your store to succeed, it will take much more than being a profitable business. It needs to be a money-saving one, too. There is a lot that goes into the process of saving your business money. It is not as easy as most think. Taking cash and stashing it away in a bank account, does not cut it. There are several money-saving methods you will need to learn and use. Start now to make your dream of being a successful business owner a reality.
The Four Stages of the Money Saving Process
To start, there are four questions you must ask and examine to make the money saving process work.
- What is a real deal?
- What is impulse buying?
- What is money, mismanagement?
- What is the best way to save money?
The answers to these questions may reveal some underlying issues you had no idea were there.
1. A Deal is a Deal, or Is It?
Often times, you will receive advice from other business owners. Especially if they are your friends or colleagues. Typically, they want to offer you helpful money-saving tips. Some of the common ones, are, “Take advantage of buying in bulk,” and “ Always be on the look-out for great promotions.”
Although receiving advice is nice, it is crucial to learn what a real deal looks like. You need to do this before acting on what others say. One mistake business owners make is placing their focus on the price tag. This is often how they determine if they are receiving a “real deal” or not. Of course, having a smaller price tag does help, it should not be what seals the deal.
To save money, you must use it wisely. Make sure the products and services you buy fit your business needs. Otherwise, you are wasting time and your company’s’ dime.
Hence, what looks like a deal is not always a deal.
2. Stop the Pulse of Impulse Buying
No matter how hard you try, you will still experience moments when you see an item on sale, and you want to own it.
You must not allow this sensation to take over, as it is a fleeting one. When times like these do arise, make sure you have money-saving techniques by your side. Use them. This will help prevent frivolous spending and help you stop the pulse of impulse buying.
When you do choose to buy, there should always be a reason.
Why You Must Have a Reason To Buy
No matter if you use cash, debit, or a business credit card, you want to save money. The best way to make this happen is to have a reason for buying an item. Every single purchase you make needs a purpose.
The purpose of buying an item can be:
- It is cost-effective
- It is an investment
- It will bring ROI (Return on investment)
- It is multi-functional
Once you know how an item will help your business, then you are buying with a purpose. This process is how you can save money every time. Without having money saving practices at your fingertips, you will buy unnecessary items. Be aware, the errors you make can be costly, and even the end of your business.
3. The Cost of Money Mismanagement
There are common money spending mistakes many businesses are making. They just do not know it, yet. To ensure your money is safe, examine the current state of your business expenses. In doing so, you will get a better sense of any underlying issues.
If you are unsure of what to look for, here are some money spending mistakes to avoid.
6 Money Spending Mistakes
These six mistakes are ones you and your team need to stop making today.
- Having only a rough estimate of how much money comes in and goes out of your business.
- Forgetting to pay off expenses.
- Not setting spending limits for you and your team.
- Continues paying for equipment or services you no longer need.
- Choosing not to become a lean producer.
- Using personal finances to buy business-related items.
Once you identify the problem(s), you and your team can work on correcting them. The sooner, the better. According to a U.S. Bank study, a whopping 82% of businesses that fail, do so because of cash flow problems.
You and your team must learn how to avoid hurting your bottom line. Almost one in 12 businesses on average will close each year, and you do not want it to be yours. Going forward, use various methods to prevent money mismanagement from happening ever again.
You do not want your mistakes to be the reason your business must close its doors. Stop now before it is too late.
4. The Best Way to Save Money: Is By How You Spend It
Most will tell you, the best way to save money is not to spend it. But, when you have a business, this is not realistic advice. Although you want to save money, as a business owner, you know you will have to spend it.
What most do not know is how you spend it, can allow you to do both — Spend and save. It might sound outrageous, but it is true. When you are mindful about how you spend your business money, the more money you can save. Of course, you will still want to put money away for a rainy day, but there is more to saving than most realize.
How to be Mindful When Spending Your Business Money
Before you can save money, you must resolve all issues, first. If mismanagement is still happening, correct it. As you do not want to be chasing your tail. This is what will happen if you try to save money while significant money problems exist. Once you have a handle on your money, it is time to use methods that will help you save while you spend.
Spending and Saving Money Methods
How you spend your money will impact how much you save. There are several ways to help build your money-saving process.
- Use a search engine, like Google, to research how to stop wasting your money. You can find various methods on how to stretch your business dollars.
- You can also use the internet to find better prices for office supplies. You are bound to find exceptional items on Craigslist or the Facebook Marketplace.
- Use your smartphone to check social media, eBay, and other sites. You can locate useful items for a fraction of the cost.
- Incorporate low-cost spending methods. Instead of eliminating items altogether, find ways to lower their costs.
Examples:
- Save money by stocking the employee fridge with items you find at the grocery store. Giving employee perks does not have to break the bank.
- You might also want to consider switching from cable to Netflix in the lunchroom.
The more methods you have, the more money you can save. Now that you know the stages, you can start using the money-saving process.
Here are twenty-five tips to add to your list of saving money methods to ensure it is happening inside your business.
How to Save Money for Your Business
As a small business owner, you know how risky having a business can be. You are always dealing with high competition, an ever-changing marketplace, and significant investments. All need you to make split-second decisions. And, when it comes to your money, there is no room for hesitation.
It is vital that you have a long list of go-to money-saving methods to ensure your money never goes to waste.
Practical Money Saving Tips Your Business Needs:
Here is a list of ways that will save you money.
- Find and use small business advice problems
- Embrace remote workers with home offices and telecommuting vs. full-time, in-house employees
- Rather than spending money on products or services, do it yourself (DIY), instead
- Only use the best phone service providers for small businesses
- Cut down on the cost of office space and overhead by using a power strip or programmable thermostat
- Choose cost-effective alternatives instead of using big brand names
- Have both a checking account and a savings account
- Use power-saving and energy efficient solutions
- Start accepting payments providers
- Only allow a small group of employees to have access to your business bank accounts and credit cards
- Cut extraneous employee expenses, not employees. Instead, use the money to offer perks to those exuding profitable behavior. Perks like gift cards or one-year payment of public transportation to-and-from work.
- Form strategic alliances and enter into cost-saving partnerships with vendors and suppliers.\
- Get sponsors for events to save a lot of money
- Spend money less by living in the cloud
- Keep client meetings to the lowest head-count possible
- Use a free online invoicing software
- Simplify your distribution process to lower price
- Use online time-tracking services to improve productivity
- Know your customers well enough to know where they actually go online. When you do, it makes your marketing efforts count
- Provide superior customer service that creates word-of-mouth marketing
- Focus on employees’ strengths and use them
- Use your local community. i.e., Develop organic partnerships and connect with your trade association.Find places where bartering is ok. You should also compare local insurance companies to pick the best insurance policy.
- Compare credit card companies. Look for the ones that offer the best discounts, low-interest rates, and cash back.
- Offer a group payment option for splitting the cost of a product or service among many people
- Review expenses and end the ones that do not provide a return on investment (ROI)
When you use these tips to save your business money, you are well on your way to becoming financially savvy. Once you become an excellent saver, there will be a decrease in mistakes and an increase in saving.
Make sure you only buy business-related items with a purpose that is in line with your business goals. Avoid mismanagement of your money by training your team to use effective methods. Eventually, your business will transform into a lean, money saving, and profit-generating machine.
And, this is what success looks like.
Republished by permission. Original here
Image: Due.com
Aira Bongco
I love reading this. I have been guilty of some of the things pointed out here. It is a good thing to know that you can still improve. One of the things that help me with this is Kakeibo planning.