Small businesses may develop different operation especially because of limited access to money. It is not always because they are lack of financial support. It is mostly because any decision they make will affect their business finance. Thus, money-saving decision is crucial for small business to keep operating while growing at the same time.
Balancing small business budget by money-saving
Balancing budget of small business can be challenging because the slightest change to the finance can cause major tremors to the overall operation. Thus, financial planning is very important for small business. One of the most effective and helpful strategies is money-saving. Here are some tips for your small business’s money saving.
Reevaluate your business
During this pandemic, all businesses are affected including the small one. For your small business, it is very essential to reevaluate your toolkit to ensure your business can run effectively during the crisis without unnecessarily wasting too much money. One important element you have to take into consideration is the toolkit. Different toolkit comes with different prices and functionality. Thus, choose the one that is only essential for your business.
Negotiate more with your vendors
In this struggling time, everyone is suffered. Thus, helping each others out is the best solution. Many vendors prefer lowering their prices instead of losing their customer entirely. If your business relies on a vendor, negotiate more to have lower prices. However, make sure that you give reasonable explanation on why you have to reach out to them.
Keep some of the revenue
Saving money is not always especially for a small business that has already had a tight rope. However, you can plan to keep 10% of the revenue in cash in the bank. This percentage of revenue will be a life saver for your business just in case it faces difficult times. You will be able to make good decision knowing that you have that 10% of the revenue to save your business when needed.
Reuse and recycle
You can also save money by reuse and recycle your inventories. You can find a way to cut down any unnecessary expenses. One of them is your office supplies. Instead of keep buying new assets every year, it is wise to reuse and recycle as long as they are still function properly. This way, you can save money and reduce the waste.
Try other source of income
To save money, you cannot just rely solely on your core revenue. If it is possible, you can also try to find more ways to generate your income. It can be considered as supplemental revenue for your small business. It doesn’t have to be something big. It is enough if your supplementary can add extra cash to your bank.
Save monthly revenue
Saving monthly revenue can be used as strategy to balance your budget. You can keep 5% of the monthly revenue and let it go to your business reserve. It is a good way to build your financial stability in a slow pace. To make it easier, automate the process so you won’t have a chance to forget.