Money is often a primary concern for most small business owners, as you will need to invest in the highest quality products and services, while effectively managing your outgoings.
Thankfully, running a company doesn’t mean you need to regularly splash the cash, as there are various financial tactics you can employ to improve your business’s daily budget.
To take control of your company’s future finances, and increase your profit margin, here are three money management tips for your small business.
- Negotiate with Suppliers Before Signing a Contract
Don’t be afraid to negotiate with suppliers before you sign on a contract’s dotted line. Almost every company will have a little wiggle room in their budget, as they expect customers to haggle to secure a better deal. Rather than accepting the first price they offer, attempt to negotiate a better rate to secure your custom.
You also shouldn’t overlook the terms and conditions, either. For example, a late payment penalty could cost your company dearly. If they don’t offer a grace period of 30 days to make a payment, request they add it into a contract before you sign.
- Adopt a Frugal Mindset
Even if you manage to create a million-dollar company, you should still maintain a frugal mindset. Not only should you take advantage of discounts and coupons to reduce your overheads, but you also should aim to secure the best product for the best price available.
For example, if you’re in need of high-quality Brother P-Touch label tapes for a printer, browse the market to find the product you have been looking for at an affordable rate, which can decrease your office supply expenses over the course of a year.
Other frugal tactics you can employ include:
- Buying second-hand office furniture
- Going green to lower utility costs
- Allowing employees to work from home to decrease bills
- Arranging video calls over attending face-to-face meetings with clients or suppliers
If you make it your mission to constantly decrease your daily expenditure, your business will enjoy greater profitability by the end of the year.
- Increase Your Business Savings for Greater Financial Security
As stated, a frugal mindset and mastering the art of negotiation can all lead to a greater profit. Once you have secured a deal or saved a sum of cash, it is important to add the excess money into your company’s savings pot.
This will ensure you have an emergency fund to fall back on when a big marketing opportunity arises, you need to buy a new piece of equipment, or you receive an unexpected bill.
Unfortunately, a cash-strapped business might make it a challenge for it to stay afloat, as a recent banking survey found that 82% of companies fail due to cash flow problems.
Every saving you make should be immediately added into the company savings, so you will always have the money to invest in an exciting idea, innovative marketing strategy, or the business operations when needed.
