The 10 Best Budgeting Tips for Small Business Owners

YEC
Fri, 16 Aug 2024 12:25:00 +0000
Audit-regularly, Budgeting-tip, Budgeting-tips, Business-finance, Business-expenses, Costing-and-budgeting, Hire-bookkeeper, Keep-costs-down, Operational-costs, Small-business-owner, Budgeting

If you're a small business owner, you know every dollar counts toward the success of your company. If you can keep your operational costs down, you can give your business the safety net it needs for when times get lean.

But learning how to effectively budget can be a challenge for many entrepreneurs, and is often the key reason small companies go out of business. To find out the best ways for companies to budget and lower their costs, we asked 10 members of YEC the following question:

Q. What's one smart budgeting tip for small business owners to keep costs down?

1. Invest in smart employees

This answer might sound funny, but if you are running a small business, the smarter and more creative your employees are, the better off you will be. Rather than hiring people who can only work within the confines of their past experience, hire those who are versatile and able to learn to do tasks they have not done previously. Two or three versatile workers are better than five single-minded ones. —Bryan Driscoll, Think Big Marketing, LLC

2. Join an accelerator program

When starting a small business, it is important to surround yourself with mentors and resources that will help your business grow. By participating in an industry-based accelerator program, you will be aligned with mentors in your industry, gain assistance with perfecting your pitch to raise capital, and receive amazing networking opportunities in your line of business. —Jilea Hemmings, Best Tyme

3. Find yourself a coworking space

Push off the decision for permanent office space. There are a number of organizations offering office space for rent (some will include mail delivery, receptionists, etc.). Coworking spaces are rapidly gaining popularity, as they are a simple and affordable solution. Moreover, these environments are highly conducive to networking, and the organizations often hold events to support member growth. —Ryan Meghdies, Tastic Marketing Inc.

4. Outsource appropriately

The internet allows you to hire people anywhere in the world for various jobs. Identify high-value activities for the investment of your time, and delegate the rest. Figure out how much value your time is worth per hour, and if there is a task that someone can do for much less, then you know you should delegate it. —Shan Rizvi, Just Ads

5. Keep your processes simple

Don't overcomplicate your business or get stuck paying high monthly fees by inflating your processes. The more you overcomplicate your processes—and the more products, attachments, plugins, and people you need to run them—the higher your costs. Keep things simple and effective, write down processes, and delegate as you grow. —Melissa Rautenberg, Latin & Code, LLC

6. Validate spend with data

As a small startup, it's easy to believe that the answer to all of your problems is funding. In reality, most startups fail not because of lack of funding, but because of spending too quickly and misuse of funds. One way to overcome this is to first allocate a small budget toward testing and validating your assumptions. With this data, you can make better decisions on how to properly spend. —Kyle Wiggins, Keteka

7. Hire a bookkeeper

As a small business owner, you're extremely busy. Oftentimes, keeping your books is bottom of the list—meaning it doesn't get done. Hiring a bookkeeper ensures your books are current, as well as being done correctly. It's near impossible to budget without having your books up-to-date. The small fee charged is well worth it so you can have accurate numbers and reports for accurate budget decisions. —Zack Hanebrink, HookLead

8. Use QuickBooks

Get QuickBooks and understand your finances. I've seen so many startups, too many times, not have a clear understanding on where every dollar is going in their early days. Capital and people are your lifeblood; track and understand metrics just like you do your product. —Ravi Kurani, Sutro

9. Audit regularly

All of the little charges add up. Spend time once a month reviewing charges and figuring out what recurring charges you're not actually using. It's easy to let these small charges slide, so try to stay on top of auditing and removing charges that aren't necessary moving forward. —Ryan O'Connell, Boomn

10. Ask for discounts

You would not believe the number of products that have given us discounts just because we've asked. From time tracking to bookkeeping, to staple products like Sketch or Photoshop, it all adds up at the end of the month. So, we started asking for discounts on the tools we loved the most. It's been amazingly helpful to get 10% here, 15% there, off products we couldn't live without. —Justin Mitchell, SoFriendly