One of the most arduous aspects of running your own small or medium-sized business is the dreaded admin. This is especially true if you’re a sole proprietor. It feels like such a chore. It’s time-consuming and takes you away from your core business, so you feel as if you’re wasting time that you could be using to earn money. If you don’t have the dispensation for it, it’s utterly boring.
Of course it’s also essential. There’s no quicker way to get your business into a mess than not paying attention to the administrative part. You need to manage your cash flow properly and ensure that you’re collecting all the money your business has earned. And it’s the only way to properly keep track of costs.
The more closely you keep track of your business costs, there more you’ll feel the need to control and minimise them. Here are four tips to keep your costs low and your business activity up…
When you started your business, you probably did a fair bit of shopping around to find the most reliable and economical suppliers. Yes, good suppliers can be hard to find, and when we find them we want to hang onto them. However, it’s a good idea to re-evaluate from time to time.
New players may have entered the market offering better value. Your existing suppliers may have become complacent and no longer represent the same good value proposition as they did when you first found them.
Loyalty in business is a good thing, but make sure that your suppliers are holding up their end of the deal and earning your continued loyalty.
Ideally, we should always only be spending money on things that advance our business goals. Yet, a few years in, we’re often astonished at the lack of relationship between business goals and expenditure – especially if we’ve achieved a certain degree of success.
No matter how successful our small business, we should always remember to run it as ‘lean’ as possible. There’s absolutely no need to bloat our expense sheets by spending money on things that are not necessary to achieve our current business goals. This could be anything from more fashionable office furniture to unnecessary catering expenses to a bigger bandwidth package. This doesn’t mean we must do things on the cheap! It just means that we need to be able to – honestly – match our expenditure to some sort of return on investment aligned to our business objectives.
Negotiate, negotiate, negotiate. It’s so easy to divide our overheads into fixed costs and non-fixed costs. However, don’t be too quick to consider expenses as fixed. You may yet be able to find some leeway.
Speak to your suppliers to try and get discounts on bulk ordering. Have a word with your account manager at your bank to explore options to reduce bank charges. If you have sufficient cash flow and are leasing your premises, see if your landlord will give you a discount for paying six months’ rent in advance
You can control all kinds of costs by using technology. An obvious place to start is meetings and telephone calls. Before driving across town to a meeting, consider whether you could achieve the same results by having a video conference. This will not only save transport costs; it will also save travel time, which you can put to better use.
Take a cost-effective VoIP package from your IT service provider and use this instead of making traditional phone calls. Data transfer charges for these calls are a fraction of telephone costs – especially for long-distance calling.
With some creativity, a little discipline and (unfortunately) diligent admin, there’s every chance you’ll be able to successfully control your business costs – which always translates into higher profits.