Don’t throw your money down the drain; grow your business instead through budgeting, doing research, … [+]
Do you hear that? It’s the painful sound of business owners around the world throwing their money down the drain. Every business owner (especially new entrepreneurs) is guilty of it at some point or another. But, there are plenty of ways you can steer clear of throwing your money away and save that dough for more important things, like growing your business.
Ways To Stop Throwing Your Money Away
Want to stop throwing your money out the window when it comes to your business? If so, you’ve come to the right place. Let’s break down six ways to put an end to the waste. Ready, set, go…
1. Budget, Budget, Budget
Your business budget is a nice little guide to keep you on track financially throughout the month, quarter, year, etc. But if you don’t know how to properly budget expenses and/or if you include things in your budget that are unnecessary, you could (heck, will) wind up throwing your money away.
To ensure your budget is in the best shape it can possibly be, here are a few things you can do:
- Revisit your budget on a regular basis (e.g., annually)
- Track everything with as much detail as possible
- Look where you can cut costs from time to time
- Shop around for suppliers and services
As time goes on and you become a more seasoned entrepreneur, you’ll learn what tweaks you can make to your budget to perfect it. But in the meantime, you should take all the precautions you can to improve your budget and make adjustments where necessary. That way, you don’t end up throwing money out the window on expenses you can avoid in the first place.
2. Borrow Wisely
If you’re like many business owners (roughly 56%), you may seek help from investors, lenders, friends, or family to expand your business. But if you don’t borrow said funds wisely, you could end up hurting your business financially in the long run. And you guessed it: Throwing away your oh-so-precious money.
Regardless of if you borrow from a bank, friend, etc., you need to be savvy. To ensure you borrow wisely, always know the “catches” behind the borrow. For example, if you’re getting a bank loan, know the ins and outs of the loan, including what financing options are best for your business and what kind of interest is attached to the loan.
The more due diligence you do when it comes to borrowing, the better. So, don’t be afraid to do some digging, come up with a solid plan, and ask plenty of questions before committing to borrowing any amount of money from anyone (including your friends and family).
3. Use Your Financial Data And Reports
Your business data can tell you a lot about your business—if you use it the right way. It can show you where you’re overspending, whether you’re pricing things poorly, and more. So if you want to save a few bucks, you’ve gotta look at your financial business data.
To spot trends and issues with financials, take a look at the following financial information (keep in mind this list is not all-inclusive):
Review data and reports regularly to ensure you don’t miss a beat with your finances. If you use an accountant, have them review your financial data and make suggestions about what you can change to avoid wasting your business’s funds.
4. Do Your Research
Back when I started my second startup, I needed to find a cheap way to print tons of resumes and job orders. My business partner and I ended up buying printing press after printing press from the same guy and wasting a load of money in the process. The moral of the story is this: Don’t waste your money before doing a lot of research.
When it comes to business, you have to make endless decisions. From buying equipment to finding vendors, it all boils down to one thing: Taking your time and doing a heck of a lot of research in the process. If you fail to research something, you could end up wasting money (and time!).
So a word from the wise, make sure you spend time researching things before you commit to them, especially purchases and expenses for your business. I’m talking about supplies, machinery, company vehicles … you name it. Do the dang research and compare costs before throwing money at it. I guarantee you’ll thank me later.
5. Keep Your Eye On Statements
When it comes to business expenses, it can be easy to let small costs slip your mind. Subscription services, late fees, unnecessary recurring expenses … you get the picture. Small costs can add up quickly if you’re not paying attention. To avoid throwing money down the drain on wasteful costs, keep an eye on your statements.
You can save your business a lot of money by doing just one thing: Watch small (and large) charges like a hawk. If you don’t keep an eye on your statements from month to month (or at least on a regular schedule), you’re bound to miss costs that you can avoid.
To see where you can cut costs, start by taking a look at your current bank and credit card statements. Ask yourself whether an expense is absolutely necessary or if you can make do without it (e.g., subscription service). Complete this process on a regular basis to ensure you’re not paying for unnecessary costs throughout the year.
If you can ditch the expense or two or three, do it. Your bank account will thank you for it. If you absolutely need a certain expense to run your business, see what you can do to get a discount or negotiate a better deal…
6. Know When To Negotiate
Cutting down costs doesn’t always have to mean completely getting rid of an expense. You can always use your negotiation skills to barter a lower price or deal.
You may be able to negotiate prices with vendors, subscription costs, renewal fees (e.g., credit cards), and more. You also may be able to save money by paying bills in advance or in a lump sum (think insurance payments).
Knowing when (and how) to negotiate costs in business can save your business a boatload of money. Plus, it can add to your skills when working with clients or customers (talk about a win-win).
Whatever you do, try to use as many tactics as you can to lower your bills and expenses and save that oh-so-precious cash. That way, you can focus on spending your money on bigger and better things (like growing your business!).