By Rigor C. Arellano
Giving isn’t passé (research actually recommends doing it all year round). But giving into impulse-buying during the holidays can hurt your pocket and your business.
To keep rest-of-the-year woes out of sight, here are a few smart budgeting tips for bright business days ahead.
1. Nothing Personal. Just Business.
Make ends meet by drawing a line between personal and business expenses.
At the core of a business—small or big—is profit. Unless you’re already rich and doing it just as a pastime (Wow!).
But since not all of us have that privilege, best reserve company profits for company expenses. Think about where your saved up money could go in a short time:
- Purchase equipment
- Reserve some for taxes
- Raise employee salary and/or provide helpful business-related training
- Expand your business
Also, keep and organize your receipts according to purchase date. This will help you track where your money went for a given time period easier.
2. Love Pre-loved
Whoever said that company purchases always need to be new?
Buying pre-loved items can save you a ton of money for getting long-lasting equipment for a fraction of or even half the brand-new price. Included in this list are office furniture, electronics, and decor.
Basically, anything needed but not vital to the consistent delivery of your quality product or service.
If a piece of equipment is important for producing your desired output every time, then don’t cheap out on buying refurbished or second-hand. Consider getting a new one a wise investment.
3. Consult First
If and when you do buy equipment, ask around first about its performance and longevity.
There are online review sites that offer helpful advice, or you can ask those in the same business what has worked for them through the years. You might even find out where to buy the item at its lowest price.
After all, wise investments come from informed decisions. So know as much as you can about something before buying it, and you’ll have no regrets later on.
4. Know Your Sources
Say you’re a small restaurant. One of the smart ways to go would be to get quality ingredients from budget-friendly sources:
- Look for online deals and discounts.
- Do some window-shopping first at wholesale-retail stores for product offers not available at your local supermarket.
- And, haggle nicely.
Knowing your sources doesn’t mean just locating them easily on map. It’s also about establishing relationships with them. Take your supplier for example.
Being their loyal customer for some time, you can ask for discounts or have them pick the best ingredients out for you. Or you can “Bribe a grower”, as mentioned in the video below.
5. Dues When They’re Due
Form the good habit of seeing your monthly bills first before spending.
That way you’ll know how much to allot for them and how much you can spend on other items. This is also good practice for any business loans you’ve taken and avoid paying any overdue charges.
Then, there are your taxes. New business owners sometimes fail to remember setting money aside for these. Experts recommend saving 20% of your monthly gross revenue, so that you’ll have enough to pay for taxes when they come.
6. Do Some Troubleshooting
Are your utility bills higher than before? If additional work leading to sales isn’t the reason why then better do some store inspection — both on operations and equipment.
Look around and see where energy-efficiency means can be applied in each step of the production line. Who knows, it might even make you think ways on how to deliver your service faster and better in general?
As for utilities and equipment, check if all are working properly. Is there any minor leak in the water pipes? Maybe the fridge door is left open at times?
That being said…
7. Ready for the Unexpected
It’s good to save up some of your profits for unexpected costs, which can come from any aspect of your business.
Should a few glasses break, one or two tables need to be fixed, or the services of a plumber or electrician are in order, you’ll have some emergency cash to cover it.
8. Hire Freelancers First
You’re thinking of a project to get more people in-the-know about your product or service. And for that you believe you need someone to strategize promoting your brand. Hold off hiring a full-time employee just yet.
You might want to opt for a freelancer first. They can do the job and won’t:
- Take up office space
- Need new equipment
- Consume electricity, internet
- Cost you state and federal taxes
If there is a position however that would require hiring a full-time employee, then consider budgeting for that as well. From hiring to training to benefits to taxes, you have to keep all these in mind.
Proper budgeting doesn’t mean hampering one’s generosity. It simply means you should practice it where applicable so that you’ll have more to give later on. For one thing, giving benefits, freebies to employees to add to their job satisfaction.
If your people are well-taken care of, you’ll manage to gain their loyalty. More importantly, in word and in deed, you’ll be teaching them to give the same treatment to others, mainly your customers. And happy customers always return.
See? Giving isn’t passé. So save smart already.