Times have been tough for many business owners during the pandemic. As the vaccine rollout progresses and offices and venues reopen, many company directors will be looking for ways to maximise profits. While boosting sales plays an important part, managing your money is also essential. Reducing expenses and outgoings can help you increase your margins and control spending. In this guide, we’ll explore some simple ways business owners can make their money stretch further.
For most business owners, staff wages account for a substantial portion of monthly outgoings. Companies need employees to function effectively but there are ways of saving money and improving efficiency. As flexible working has become more common, there are opportunities to lower expenses linked to renting business premises and paying staff expenses. Employees are not travelling as much and many are spending more time at home, which means that firms may not need a base full-time. If you are managing a remote team or you are combining office work with days at home, explore the possibility of renting offices that provide more flexibility at a lower price. Hot-desking is very popular and you can also lease meeting rooms and communal workspaces.
Outsourcing is another means of lowering expenses. Rather than hiring full-time or permanent members of staff, outsourcing enables you to access the skills and services you don’t have in-house without adding to your wage bill. Look to outsource jobs and tasks that will free up time for your core employee team and make your business more efficient. Examples include professional cleaning for a healthcare practice or digital marketing for a restaurant chain or a clothing brand.
Negotiating and shopping around
Shopping around for the best deals can save you a fortune in business as well as at home. Analyse your finances, look at where your money goes and compare prices and quotes. From negotiating with suppliers and distributors to taking out insurance, there are ways to save. Go into negotiations with knowledge of the market and a firm grip on the figures and put forward realistic offers. Use sites like https://insuranceoctopus.co.uk/business-insurance/ to compare business insurance quotes and bulk buy products that you use frequently or sell in large numbers. If you can save across the board, even small savings will soon add up, enabling you to maximise profits.
Budgeting is essential for managing money effectively, and it’s advisable to utilise a monthly or quarterly budget from the outset. Budgeting not only enables you to calculate how much disposable income you have to reinvest, save or take out of the business but it also allows you to see where your money is going. You can use your budget to highlight expenses that are too high and make savings to lower your outgoings. It can be difficult to keep up with spending when you have multiple payments going out of different accounts on a monthly basis. With a detailed budget, you’ll know exactly where you are up to. For helpful budgeting tips, take a look at this article https://www.thebalancesmb.com/reduce-small-business-costs-2951415.
Increasing profits can be done by boosting sales but it’s also crucial to keep an eye on expenses and outgoings. Reducing spending, saving money and improving efficiency can make an incredible difference to the balance sheets.