7 Ways to Manage Business Finance & Resources
Managing a company’s resources and finances doesn’t necessarily mean saving as much money as possible. It means making clever decisions that will grow your profits in the long run. Here are 7 essential tips to keep in mind when planning strategic financial goals.
1) Learn to Do More With Less
Always keep a frugal mindset when it comes to managing business finances. Can you make what you’re spending go further? Can you negotiate a better deal? The first price you’re met with is rarely the one that ends up being paid so always set out to get more bang for your buck. Always remember that quality is much better than quantity, so if you’re met with a decision between the two, always opt for the former.
2) Make Sure Every Purchase Is Necessary
Don’t spend money if there isn’t a necessity. Getting into the habit of spending on whims, or without proper analysis, can soon escalate into a big problem for the company. Remember, every penny saved goes towards your year end profits. This isn’t to say don’t spend in order to grow profits, just make sure proper research has gone into the expected ROI.
3) Set Up and Stick To A Realistic Budget
You need to be crystal clear on your expenses for the year, have something set aside for emergencies and at least 2 months running costs in your cashflow. Make going outside of your budget a big deal that needs serious justification.
4) Always Look For Alternative Sources Of Finance
It’s not always advertised the best, but many companies are eligible for government or organisational grants and funding. Make sure you conduct frequent research into this and if your business meets the criteria, you’d be mad not to take advantage of that.
5) Update Equipment Only When Necessary
Phones, Computers, Cars, Software etc. can all be incredibly expensive to update. Make sure you are only updating when it is necessary, not just be using the newest ‘thing’.
6) Saving For Now Vs. Later
Don’t think cutting costs on every little thing will save you money in the long run, quite often the opposite is in fact true. You need to keep the long term in mind and sometimes, sacrificing on quality to save a few bucks initially, will come back to haunt you when you have to replace the whole thing, years before the planned date.
7) Compensate Your Employees Fairly
Your employees are the lifeblood of your business, without them you cannot hope to grow. Make sure you have good remuneration packages in place to reward for hard work. Along with good leadership, this will make them more productive and inspired to help the business grow as much as possible, increasing profits.