With the bulk of 2015 ahead of you, you've probably lined up a few resolutions for both yourself and your business. Although saving money is likely a priority, are you doing everything in your power to make that happen?
You need to spend money to make money. But when you focus too much on rapid expansion over conservation, you can get distracted from making the best decisions for your company's financial health.
To get you on track to save big in 2015, here are five practices you need to start today:
1. Optimize Your Expenses
Expense optimization will help you better identify the inefficiencies in your business and the strategic partners who can save you money in the form of time, focus, and opportunity cost. "Your business's efficiency and focus increase exponentially for every hour the right vendor saves your team," says Beth Schoenfeldt, CEO of SimpleBusiness, an invitation-only procurement platform that partners with professional organizations and has helped hundreds of entrepreneurs and small business owners secure tens of millions of dollars in savings on business expenses.
"For example," says Schoenfeldt, "It might make more sense to spend money on operations or marketing needs rather than operational team members to handle your books. By reviewing your optionality with a professional, you'll make the best decisions for your overall ROI."
2. Instill an Ownership Mentality in Your Employees
This is probably the most important practice that has saved our company money. If employees don't act like a cog in the wheel, they'll think about what's best for the company. When they feel trusted and empowered, they'll take ownership of their work. Though this might sound simple, it won't happen without trust. If you can't trust your employees to do what's best, you need to let them go.
3. Find Partners You Can Grow With
As a growing company, finding mutually beneficial partners you can collaborate with will save you money in the long run. My company found others with similar audiences but complementary services, which opened doors to opportunities we otherwise would have paid for. We received free tickets to attend VIP events at conferences, were given discounts on services, and gained access to a variety of other assets. The No. 1 rule is to make sure the partners care about your company's growth and aren't just in it to make a quick buck.
4. Lead by Example
A leader's behavior has a powerful influence on the behavior of others in the organization. Just because you're an executive doesn't mean you need five-star hotels and fine dining. You can instill values in your staff by making a conscious effort to save money or unintentionally promote wasteful spending by living lavishly on business trips. If your employees see you throwing away money like it's nothing, do you really expect them not to do the same? Even if you set spending limits, the message is clear--and this carelessness will nestle its way into other areas of the business.
5. Collect Meaningful Data
It used to be that only large companies had the resources to collect data. I remember hearing Gary Vaynerchuk compare the struggle of measuring brand awareness and PR to measuring the ROI of your mom. Times have changed, and data has become more accessible. There are tools to track nearly everything you spend money on, and if not, there's probably a business opportunity to create the software.
During our first couple years, we didn't use data to help us make most decisions. Because we had no concrete information contesting--or confirming--our decisions, we knew we needed a better system in place. Once we got HubSpot, Buffer, and other measurement tools, we discovered that we were using our resources inefficiently and compiled our own exclusive data.
Your company's finances are the backbone of the organization. By building a foundation of conservation and careful money management, you can lead your company into a profitable 2015.