Is Your Small Business Overspending?

When starting your own business, it’s best to eliminate the fluff. Too many small business owners fail because of overspending and an inability to budget. Here’s a list of the best ways to take control of your small business and save big.

SUPPLIES AND SERVICE

Frugality is your friend – instead of purchasing the newest software and technology, consider utilizing free software to facilitate operations. Hootsuite offers limited social management tools for free. Asana and Wrike offer free project management systems. WordPress, Wix, Drupal, and others offer free content management. Insightly has a free customer relationship management system, and so on. There are many other free, “freemium” or free-trial software that smaller enterprises can use as they grow. This will help the business operate more efficiently, save costs on budget and allow the company to fully evaluate the software before making the investment in paid suites.

EMPLOYEES

Often times, the people who work for you will determine the success of your business. To lower spending, new businesses should limit managerial hierarchies and contract freelancers when appropriate. You will pay a higher hourly rate for a freelancer than a full-time employee, but contractors tend to have varied experience, meaning they require less management and even less of your valuable time. Writers, designers, software developers and marketing experts are just a few of the roles that many startups hire on a freelance basis in order to cut spending. Additionally, freelancers can work out of their own homes, saving you money on office space and other resources.

OFFICE SPACE

In its early stages, you can save a great deal on rent, utilities, and supplies by running the business from your home. Of course, some businesses require a retail space or office to operate effectively. To minimize costs, consider joining forces with another small company to rent a shared office. You can split expenses and utilities down the middle, and even go in together on office supplies and furniture.

ADVERTISING AND DESIGN

Instead of hiring that top-rated design agency, consider performing some of your marketing efforts in-house. By developing your website and improving your social media presence, you can reach your audience without spending a fortune. As an added bonus, business owners performing some of their own marketing have the opportunity to gain valuable insight by interacting directly with their customers.

T R AV E L & EXPENSE MANAGEMENT

An often overlooked consideration of new businesses, travel and expense (T&E) actually make up the second largest operating expenditure after payroll. According to a recent Entrepreneur article, overspending actually eats up a fifth to a third of total T&E on average. As a startup, you have the power to tackle this trend upfront, before it becomes an issue down the line. Typically, if no policy exists, or the policy does not set clear limits, employees pick the airline, hotel, restaurant, and/or rental car of their choice—usually with convenience, not money in mind. People tend to spend more when it’s not their money. Divvy is the first free and fully automated spend management platform. It includes all of the features of cloud-based automation, without the pesky hidden costs. Within a matter of minutes, Divvy gives you visibility and control to every part of your businesses finances. For example: setup budgets and company spending policy down to each employee. Get real time spend insights. Send/block funds in real time. Generate IRS compliant digital receipts on all company purchases (AKA no more manual reimbursements or filing expense reports). The best part: it’s free.

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