One common problem that many businesses face is cash flow. Though this problem stems from a lack of customers, it grows because business owners don't know how to follow the way their business changes and adjust the budget accordingly.
If you're facing this problem, then the first thing you need to do is cut some of your business expenses. I know I've had to make adjustments both when I was starting out and even now as I find hidden fees. If you're not sure where to start, here are a few expenses you can evaluate while you try to get your business back on track.
Your businesses' insurance is one of the most important expenses that you have. It can also be the costliest. You don't want to cancel your insurance policy but that doesn't mean you can't touch your insurance policy.
One thing you can do is increase the deductibles. If your insurance company sees that you'd put more of your finances on the line if something happens, then they'll lower your monthly rates.
Another thing you can do is reduce your risk. You can ask your insurance broker what actions you can take to seem less risky to the insurance company.
They might tell you that your building is too exposed and there's nothing stopping a thief from coming in and taking your items. They then might recommend that you get a security system. If you implement these suggestions, you'll have less risk, and you can probably negotiate a lower rate with them.
Also, don't mindlessly pay your insurance rates each year. Before it's time to renew it, take some time to research other companies that may offer the same coverage for less.
There are certain roles that you'll always need so your business can run smoothly. If you run a brick-and-mortar business, you'll always need a sales representative. If you run a digital business, you'll always need a web developer to ensure that your website is running smoothly.
However, there are some roles that you don't need full-time. Instead of hiring full-time employees, you can outsource the work you need to get done to a freelancer or independent contractor. As someone who has done this in the past, you'll find that there is plenty of talent available to manage a task when needed.
3. Supply cost
Similar to your insurance policy, you shouldn't pay your vendors without searching around at least every six months to a year. As inflation increases the prices of goods, you probably aren't paying the same price you were before for your supplies. Look around for vendors who offer the same supplies as your current one at a lower price.
There's nothing more important than face-to-face interactions when trying to build relationships that can help your business grow. I'm a strong believer that every business owner should attend at least one conference so that they can meet other people who have the same business dealings as them.
However, if money is a problem in your business, then going to many conferences a year isn't business smart. Pick the events that can help you build meaningful relationships for your business. If you want to meet like-minded business owners, go to a small conference that's for your industry. You're more likely to see and talk to the same people, versus going to a larger conference where building relationships are more difficult.
5. Office space
One of the biggest expenses that a business owner has is the lease for their office space. However, with improvements in technology, it's may not be required to have an office space.
There are many businesses that only run from home, and it works for them.
Do your clients come to your office to purchase what you offer or discuss your services? If not, consider working remotely. Even if you have employees, they can work from home too.
If working from home isn't for your or your business, then consider downsizing or negotiating your lease with your landlord. If you've been at your building for years while other tenants have come and gone, talk to them about a loyalty discount. If they don't budge and your location isn't important, then consider looking around for other options.
Alternatively, if your business can be done part-time from home, you may find that you can save money either on space by renting out space when needed. You may find that communal spaces like WeWork are a viable solution. It may even improve overall productivity.
While your business expenses might be unique, everyone has a budget. Find an area that you can cut back your spending back on. Then you can invest and focus on other aspects.