The difference between a successful business and a struggling business comes down to something pretty simplistic; a successful business brings in more money than it spends. There are a number of ways a small business can grow its profits and improve cash flow. One of the easiest and often overlooked areas is to review your discretionary business expenses. Discretionary expenses are recurring or non-recurring costs for non-essential items or services; they’re wants, rather than needs. When was the last time you seriously looked at these expenses and considered their impact on your business? Review these 3 business expenses – you could save thousands of dollars and build a stronger business.
1. Memberships and subscriptions
Most of us have at least one membership or subscription that we don’t use and keep forgetting to cancel. You probably only think about it when you see an auto-charge hit your credit card once a month or each year. It might be for an online software tool you once used, an app you downloaded and forgot about or a business networking group you’ve since outgrown. Take stock of every membership and subscription you’re currently signed up to – are they necessary? Cancel the ones you don’t use or need. You could easily save hundreds of dollars over the course of the year.
2. Marketing and advertising
A lot of businesses undertake regular marketing and advertising activities. However very few business owners assess their value and impact. It’s easy to spend big on marketing and advertising, but is it effective? Consider how much you are spending and whether your current approach is working for you. The tools available for promoting your business have never been so plentiful and accessible – and many of them are free. Review and adjust your marketing and advertising practices to get the most out of them. This could see you attract more customers at less cost, saving you thousands of dollars while you grow your business.
3. Inventory, equipment and office supplies
There is huge potential to save money by undertaking a review of your current inventory, equipment and general office supplies costs. Can you find the same products for a reduced price with another vendor? Is buying in bulk to reduce per unit cost an option? Are there any expenses that are entirely unnecessary, and can be cut altogether? If you don’t already, keep track of every business expense – it’s the best way to identify opportunities to keep costs down.
Plan to review these business expenses every 3 to 6 months. You could easily save thousands of dollars over the course of the year. And if you’re struggling to manage your business cashflow, we have something that can help. Download our FREE Cashflow Plan to get back on track.