For some small businesses, revenues can fluctuate from month to month. A month of feasting can suddenly give way to a month of famine. And though it’s admittedly not easy to control revenue flow, you have some power over monthly expenses.
When you’re a small business owner, you probably can’t put the firm on autopilot and step away from the controls. Certain tools make it easier to automate and streamline processes that historically required manual input, but plenty of other duties require your direct oversight for best results.
Finance—and specifically your company’s budget—is one of those things. Certain fixed expenses remain steady from month to month. You can’t do much about these, and pretty much have to ride them out.
But the variable expenses are where you can make or break it. Whether small or large, variable expenses can sneak up on you and turn the numbers on your P&L statement from black to red.
If you strive to be a more engaged and conscientious owner, you’ll want to focus more of your time on managing variable monthly expenses in a manner that enables you to save money. Not only will this free up funds in your budget for purposes of growth, but it will also empower you to remain lean and nimble.
Not sure where to start? Here are four practical strategies:
Relocate to an Affordable Area
For starters, you might be able to relocate to a more affordable area where rents aren’t as expensive. You’d be surprised what a difference a move to another part of town can make. You could save thousands of dollars in rent simply by being willing to downsize or do without amenities you may not actually need. That’s cash that can be freed for spending on more important items, such as inventory or human capital.
Cut Down on Heating and Cooling Costs
Have you ever pulled up your office utility bills at the end of the month and been shocked by the total cost of your electricity or water? Among smaller outfits that don’t have tons of resources, an unexpected hike of a few hundred dollars can be a big deal. That being the case, you should make every effort to cut down on heating and cooling costs in any way you can.
If your office has lots of windows and gets a lot of sunlight, a simple investment in quality blinds can make a noticeable difference. The thermal lining in some of today’s top blinds does a phenomenal job of preventing heat and cold transfer from the outdoors.
How dependent is your company on paper? In recent years there’s been a massive push for going paperless in the business arena, but did you know there are also major savings to be enjoyed for the companies that hop on the bandwagon? You can find out more about the specific savings your firm could enjoy by checking out this resource.
Outsource Whenever Possible
Finally, you have to be willing to outsource non-critical tasks. It’s rarely cost-efficient to hire full-time employees for simple tasks that could be handed off to a freelancer or independent contractor. When you work with contractors, you don’t have to pay benefits and taxes, which can add up to considerable savings.
How Will You Reduce Expenses?
It doesn’t matter if you have a small or large budget, managing monthly expenses in a responsible manner will put you in a stronger position to achieve success. Although variable expenses entail only a portion of your budget, they can make or break your cash flow over a given period of time.
Which of the strategies and tips outlined in this article do you think you’ll try first?
Author: Jenna Cyprus is a freelance writer from Renton, WA who regularly covers tech, business, marketing, and social media. Follow her on Twitter.