5 Ways to Manage Small Business Spending
Cash flow is the bread and butter that makes (and breaks) your small business. In order to have a healthy cash flow, small businesses must ensure their spending and expenses are managed and controlled proactively. Here are 5 simple ways you can manage your small business expenses to ensure you will have sufficient cash flow to continue operations:
- Actively Search for Small Business Deals and Discounts
Depending on your small business, there are certain items that you may need to purchase on a reoccurring basis. For example, if you run a coffee shop, your need for coffee cups is constant. Next time, consider buying items like this in bulk. By purchasing items in larger quantities, your supplier will likely give you a lower unit price. If your small business requires you to constantly ship packages to your customers, Canada Post’s Solution for Small Businesses may be a fit for you. Did you know: by registering your small business with Canada Post, you can receive 12% - 25% discount for large mailings – domestic and international! These are just a few examples of small business deals and discounts available if you search for them, all of which have a greater return for your small business’ cash flow.
- Budget Spending for Each Department
Predetermine a set amount you are able to spend for each core department in your business – such as marketing, operations, and finance. Allocating budgets ahead of time can help you manage your cash flow proactively - and in case emergency, you will have funds available to resolve those unforeseen issues.
- Revisit Budget and Make Necessary Adjustments
It is important to revisit your budget to ensure your small business continues to be financially stable. Consider re-examining your financial books every quarter and make necessary changes to your expenses. If your operations and overhead costs are too high, review your accounts and identify the reasons behind them. If the high costs are associated with unnecessary spending, make the necessary adjustments to ensure your cash flow continues to be positive.
- Get Resourceful – Do More In-House
In some cases, outsourcing certain tasks to third-parties is beneficial as it allows you to focus on the activities that contribute to the overall cash flow of your business. In other cases, small business owners should consider doing certain tasks in-house. In the long-run, contractors may become an ongoing expense - so why not consider taking a class and doing it yourself? For small and medium-sized businesses in Ontario, the Canada-Ontario Job Grant provides up to $10,000 in government support per person to businesses and organizations with a plan to deliver short-term training to existing and new employees. This job grant is a great opportunity for employers to invest in their workforce, and help cutback ongoing contractor expenses in the long-run.
- Set Long-Term Financial Goals
Every business starts with a business plan - a road-map to achieve their mission and financial goals. Rather than focusing on short-term goals just to make ends meet, dig into the future, and develop long-term business strategies to achieve bigger goals! Small business owners should ask themselves questions like 'where do I see my business in the next 5 years?' By establishing longer-term plans, small business owners will have a better idea of how they want to manage their expenses, and how to achieve their long-term financial goals.
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About the Author
Lendified is Canada's premier online lender for small businesses. The company was founded by former bank executives dedicated to provide businesses with fast, easy, and affordable financing. The Lendified team regularly produces blogs and guides to help small business owners succeed.