The drastic change in our economy affects the community, with the challenging changes, for business owners whether small or big, looking at the finance flow has become its major priority in order to sustain its operations.
In fact, stakeholders are now reviewing their expenses and taking initial steps for them to control its overall cost.
As business owner like you, scouting for effective ways for you to manage your expenses effectively, you can start by evaluating your financial flow for you to determine if
- you are losing, breaking even
- or making profit.
So, if you found out that you are losing profit, it is the time for you to trim cost in order to minimize and even eliminate losses.
Cutting your overall cost, in your attempt to cut it out,
- you need to examine each element that involves expense,
- check everything even if it’s small,
- after such determine the items that you can do even it already out.
In other words, do not be uncertain to remove items that are useless in the overall operation. You can also trim extras or what we called as perks like snacks.
It is way better to create weekly reports that will summarize your overall expenses and revenues of the week. Then make adjustments when needed, specifically when you found out that the expenses for the budget allocation is much more than the actual one.
Remember that there are important areas in the business that increases revenue, like the expenses on the production related cost and marketing, these should be the very last item to be cut.
We have critical areas to be considered when you review your expenses:
The first thing to look at it your inventory, you need to review it and determine items that are not getting good results.
The best thing to do is to give discount to products with very slow turnover and replaying it with products with high selling rate.
Contacting your business partners and ask them if they want to share expenses on products so you can get good discounts on quantity based purchased.
Contact your longtime suppliers and try to ask if you can negotiate its payment terms or get discount. And if you have a good record with your suppliers, you can try reminding them about your commitment to good business.
Evaluate your cost of energy and look for possible way to reduce its overall expenses.
You can then suggest turning the lights and equipments like air-condition machine off when it’s not used, you can also use motion sensors and automatic timers or adjusting the thermostat settings
If your employee leaves, you can either split duties among your staff or ask for a group to help on a part-time basis.
Cancelling unnecessary office subscriptions and even services, the next time you order for new supplies ask for discounts and consider office items without extras. Perhaps using email reduces the cost of paper items.
This is the time to consolidate your overall operations and consider leasing or even subleasing office space that are unused, moving to an affordable area or renegotiating your lease terms.
You can use mobile computing software, web meetings or any other forms of virtual collaborations in order to minimize total travel cost.
If assistance is needed on your reviewing process, you can contact your financial advisor. By just taking simple steps for you to mange expense today, this can create a positive effect in your business to become well in the future.