Control your Cashflow

Here are 5 ways to cut unnecessary expenses and get a grip on your financial situation.

All businesses need a steady cashflow to operate. The money in your business needs to be well managed and monitored to ensure that all expenditures are accounted for. A successful entrepreneur knows how to balance costs in order to make a profit. If you’ve started a business, but you’re not exactly sure where the money is going, you need to rethink your approach. Here are 5 ways to do just that.

1. Determine your expenses
This means working out exactly how much money the business needs and uses. Get a notebook and write everything down. Calculate your recurring monthly expenses (employee wages, utilities and office rent) as well as your daily cost of operating (vehicle fuel, office supplies, shipping costs etc). Once you can tally these costs, you will know the minimum income your business needs to make each month to cover your expenses.

2. Cut your extra costs
Expenses for the business are often not just your basic operational costs – many entrepreneurs may find themselves paying for things that they don’t really need to stay in business. For example, you might want to have the best furniture in your office, or a TV in reception. While these are ‘nice-to-haves’, these expenses add up -  and don’t add to the business. Getting professional is getting real. You need to start from the bottom to get to the top. Get used to working with the basics if you want to build your business.

3. Know your limit
Keep and maintain a budget for the office. As a first time employer, it might feel appealing to offer your employees as much as you can. But unless your business is soaring, company-paid cellphones, bonuses and lunches are a luxury you cannot afford. Be sure of what you can and cannot offer employees and be sure to stick to your budget no matter what.

4. Pay your bills – on time
Part of knowing your costs is making sure you settle your bills. Sometimes suppliers or service providers offer deductions on accounts that are settled early. Take these opportunities to save money and put it back into growing your business.

5. Go for the deal
Wherever you can, try to think of ways to cut costs. When looking for a service provider, don’t go with the first quote you get. Shop around. Get quotes from at least  three different companies to not only get an idea of the market prices, but to find the best deal in town. But remember, always ask about the fine print. Know exactly how the deal works and what is required of you.

Inform yourself at every turn by being conscious of your business and its financial expenses. This will ensure that you stick to your business goals and achieve them.