How to Handle Business Growth Without Adding Unnecessary Expenses
The money you don’t spend is the easiest and quickest profit your business earns. After all, businesses are there to earn money. But oftentimes, business owners spend money on things they simply don’t need to be wasting revenue on.
Cash-flow problems are the reason behind 82% of failures that occur in small businesses, according to Business Insider. This is double the amount than the factor that resides in second place: no market for the product/service.
This means that if you are a small business, you are more likely to succeed by selling a product or service that no one wants than you are with poor cash flow.
Minimizing expenses, however, is not the easiest thing in the world to do. How do you figure out where to make the cuts? Check out these potential spots below where your business can save money.
1. Evaluate Your Team
One place to start when thinking about eliminating unnecessary business expenses and increasing revenue growth is by taking a look at your team.
Are they good at what they do? Are they fully engaged with their role in the company? If the answer to any of these questions is no, you should start looking for someone who would fit the job role better.
As difficult as that decision may be, once you find someone who isn’t performing as well as they should, consider cutting the fat and move on.
An underperforming player is going to cost your business more than you may realize. In contrast, hiring someone who is a productive team member is going to produce a better quality of work while getting more done for the same cost.
In fact, if you outsource and hire freelancers or contract workers for some roles, you can potentially even make huge savings – both on taxes and employee-related expenses – and get efficient work done.
As a business, time is your most valuable asset. It is a factor that immensely affects your profitability and an unproductive employee can impact it detrimentally.
Therefore, retain only those employees that bring value to your bottom line.
2. Consider Automating Your Processes
Have the right team in place? Great!
Still need help? Hold on a second before you start adding to your headcount.
Consider streamlining and automating your processes before you start an entire recruitment process and spend money on hiring someone. Not to mention the costs of onboarding, training, and salary packages that follow – all of which can add up substantially.
Make it a point to hire slow. Focus first on automating your manual processes, inefficiencies, data silos, redundancies, and other non-revenue generating activities that can do without a dedicated employee.
This will help save your bottom line immensely and increase business profitability.
3. Budget Diligently and Carefully
This comes as no surprise. Budgeting goes hand in hand with reduced business expenses and increased profitability.
It’s essentially impossible to make wise financial decisions without having a clear idea of the money that is coming in and going out of your business each and every month.
As your business grows, it is crucial to continue analyzing your budget and tracking your expenses. Your budget should always be a work in progress. You look at it every day, consult it, follow it, and make adjustments accordingly.
Budget allocation can also be specifically challenging. Many new business owners fail to make room for unexpected expenses because they underestimate their costs. This results in expense bloat – something that all companies should be wary of, especially as they are scaling and achieving business growth.
4. Be Innovative
Technology helps us save money and advance our businesses in so many different ways. From teleconferencing services to online payment sources to remote desktop apps, there are a ton of ways you can reduce business costs with tech tools.
Explore new technologies that can help your business grow by improving the efficiency of your systems and increasing productivity while reducing costs at the same time.
For instance, many businesses nowadays use cloud computing systems to maintain their databases rather than relying on in-house hardware that can be quite expensive to buy, maintain, and deal with in the long run.
It is always financially wise to look for better efficiencies out there and try out new and innovative technology to solve your issues. Using technology whenever you possibly can will not only save you money but also take your business forward by streamlining your processes.
You should, however, be mindful of not overdoing it with the number of applications you use. There are many apps that you and your team never use yet they are on your computer, costing you money every month/year.
5. Invest in Your Strengths
Your strengths are the factors that distinguish you from your competitors. It could be anything from a strong brand image to a unique technology that you use.
As a business, it is important to prioritize your strengths. At one point, you have to ask yourself whether it is more profitable to spend more time on your challenges or your strengths. In most situations, you will find that the answer to this question is investing in your strong points so that your business continues to grow at a steady rate.
Reducing unnecessary business expenses means investing wisely in places that will generate the most profit for your organization.
Therefore, rather than always trying to improve your weaknesses, look at areas that you are already good at. Invest in newer opportunities for your team in those areas and see how you can refine and better your existing processes.
The Bottom Line
Managing finances may not be the flashy side of running a business that you enjoy, but it's what underpins everything you do.
It may be that your business is growing and you need to get things in order by going digital. Or you might already have the right tech in place, but you need a better team.
Whatever you need, figuring out where your money should be used in order to generate the maximum ROI is imperative to achieving business growth.