Making money in business isn’t guaranteed, which means many CEOs and entrepreneurs closely guard their wallets. But there are ways to get smarter with your organizational finances and spend wisely so you can keep growing and earning.
Be Selective About Financial Services
No matter what type of industry you’re in, a business bank account is a must. The key is choosing an organization you can trust that offers the services you need. Most big-name banks have too many accounts to offer personalized service. Some older institutions don’t offer the responsive tools that modern business owners need. Often, working with a credit union is a solid choice.
Whatever institution you choose, look for features like cash flow forecasting, integration with your payroll software, a business credit card, and free instant deposit. No more bank runs, payroll delays, or lackluster interest-building; high-yield accounts and fast service are what companies of all sizes prioritize. In short, the best bank for small business covers your business needs while streamlining the accounting process.
Downsize Your Expense List
Some business spending is inevitable and even necessary. But many companies spend way too much working capital on things that aren’t necessary. In other cases, there are ways to cut your budget back to keep enough cash in your account without sacrificing much in the way of your workforce or creature comforts
Consider a Remote Structure
For example, though remote work is becoming more common, some companies haven’t yet hopped on board — but the potential for savings is significant. If your organization is one of them, refer to your cash flow statement to calculate your current expenditures for office space, on-site employee perks, building utilities, and anything other payable related to your brick-and-mortar location. Then, compare the costs of switching to a telecommuting model; technology costs, software products, and other equipment may be a cheaper investment than a fully equipped cubicle per employee.
Another bonus of switching to a remote structure: it can boost employee morale. According to a recent survey, 55 percent of employees say they would prefer to work at home at least a few days a week on a permanent basis. How does that boost your bottom line? Even if you don’t want (or aren’t in the position) to turn your business into a fully-remote operation, by allowing employees the option of working from home a few days a week, you can downsize to a smaller office space where your staff shares workspaces based on the days they come in. Plus, happy employees are more productive workers, so you’ll get more bang for your buck in salary pay.
Get Strategic with Partnerships
Whatever your industry, you’re likely connected to a web of services and products to get your work done. Aim to streamline your partnerships so that any products you source come from local spots to save on shipping and freight expenses as well as any other related accounts receivable. If your clients are local, you may even score points and build your business by working with other business owners in your community; doing so puts funds back into your local economy, which is a great look for locally-based brands. For services, consider outsourcing where possible and keep a list of freelancers handy for short-term projects.
Flex Your Business Status
Sure, it sounds great to call yourself a business owner, no matter how long you’ve been in operation. But that status can also earn you specific benefits that can boost your positive cash flow, though you’ll need to seek them out actively. Consider these potential bright spots when it comes to investing in — and getting value back out of — your company:
- Many businesses qualify for unique loan options for both expansion and disaster relief.
- Grants may be available in your industry, depending on your business type and goals. These programs can help increase the amount of cash you have in your account to fund everyday expenses as well as build your business to a higher level.
- Business owners and their companies often qualify for specific tax breaks.
- The right company structure — whether sole proprietorship, LLC, S Corp, or other — means lower liability and a more professional reputation.
Do your research, and you may find that more funds are available than you expected for your growing business.
Invest in Growth from All Angles
Earning revenue in your business is a must, and saving money is also a priority in all areas of your operations. But to achieve true growth, you’ll need to invest in your brand, your people, and your product or service. Overspending isn’t the name of the game — maintaining a solid cash flow on your balance sheet means keeping a balance.
Setting aside funds for reinvesting in your company is a smart strategy that pays off, often in a short timeframe. In fact, ‘conventional’ guidelines suggest reinvesting 30 to 50 percent of your organizational profit back into the business.
Strategies like partnering with an organization that can help you reach marketing goals can pay off in the form of new subscribers, customers, or partnerships. You’ll soon see the funds you spent return to your bottom line — with a wider consumer base to show for it, too.
Also think of ways you can invest in your employees. For example, if you have a worker interested in taking a business course at a local community college to build on their skills, paying their tuition is a small monetary investment that could have a huge ROI in terms of what they’re able to contribute to your business.
Saving money while running a business can sound like an oxymoron. But it’s possible to trim your expenses, boost your financial flow, and run a competitive business. Looking to add a digital strategy to increase your company’s bottom line? Contact Flying V Group for the expert advice you need.
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Robb Fahrion is a Co-Founder and Partner of Flying V Group. He is passionate about helping businesses grow using the power of the internet. Robb graduated from Chapman University in Orange, CA and currently resides in Costa Mesa, CA. Robb enjoys writing about digital marketing, helping his clients turn their dreams into reality, and he is a HUGE Mike Trout fan.