Cash flow remains an all-important concern when running a small business. Staying on top of expenses and paying down any small business loan arrangements must stand as a business owner’s top priority. Following four smart budgetary decisions could improve the chances a company remains solvent and on a sound fiscal footing.
1. Don’t Hire Too Many Employees
More accurately, don’t hire anyone unnecessarily. Small business owners do find themselves strained by juggling scores of different responsibilities. Hiring new employees provides a means of taking burdens off the owner’s shoulder. Be cautious regarding how many people are brought into the fold. Employees and independent contractors cost money. Even hiring someone for a small job five hours per week cuts into revenue. Make sure all hiring decisions are essential. Otherwise, money that could go to small business loan payments goes to a part-timer who doesn’t contribute much.
2. Scrap failing advertising and marketing plans
Paying for social media ads makes sense when those advertisements translate into boosted revenue. Spending on ads that don’t convert into customers, however, becomes little more than a contribution to the social media company’s coffers. Sometimes, a business owner feels the need to modernize promotions and follow trends. There’s nothing wrong with updating a promotional approach, but the promotional strategy can’t become a money loser. Review the cost-per-return on any advertising endeavor. Reduce or eliminate ones that undermine revenue figures. Maybe even switch to a different strategy, one that comes with more potential.
3. Perform a Much-Needed Energy Audit
Winter brings with it incredibly cold weather. Freezing temperatures not only make working in an office uncomfortable, but the possibility exists plumbing pipes may freeze or burst. So, you want the heat at a decent level. Does the office need to top 75 degrees though? Wasted energy in the form of gas and electricity drive up operating costs and do so unnecessarily. So does inefficient use of water. Driving up utility costs means driving down savings. Audit energy and utility expenditures. Find out where there’s waste and cut back on it.
4. Examine the business’ operating hours
Opening too early and closing too late without an actual financial benefit adds to potential financial drains. Keeping the doors opening hoping to pick up new customer might prove self-defeating. Staying open six days a week instead of more reasonable five could be even more disastrous. In business, all expenditures must come with justifications. If no reason exists for extended operating hours, those hours may work against you.