Your budget and budgeting ability will have a big impact on the success and profitability of your business; learning how to set up a budget and how to ensure you have the best, most accurate data can help you make the most of your revenues.
At its most basic, a budget allows you to match your revenues up with your expenses and can help you determine if you have enough money to run your business or even expand. When you lack a budget or plan, you may end up spending far more than you anticipate running your operation. Learning more about what your business spends and what you bring in can help ensure you are fully aware of where you stand and that you are running as efficiently as possible.
How to Create a Business Budget
While your brand is uniquely yours, researching into your industry and discovering what type of revenues you can expect and what kind of expenses you’ll be dealing with can help you come up with a good starting point if you are just starting out.
Get it on Paper
Lay out all your monthly costs, including rent or mortgage, the cost of your raw materials and supplies and even your expected tax and insurance expenditures. Whether you are already up and running and have real historic figures to work with from your Smart POS station or are estimating, these figures can give you an idea of what to expect.
Do the same with your anticipated revenues. Again, real figures are best, particularly if you can pair them with the same months in previous years.
Allow for Variances
You won’t spend the same amount of money each month and your revenues will vary as well. Some expenses are fixed, but others, including utilities and re-orders of consumable items can change over time. Having enough extra money on hand to cope with unexpected changes can help ensure you don’t blow your budget.
Look for Ways to Reduce Costs
Your budget is an ongoing, evolving document; examine it closely to see if there are places you can cut costs or lower expenses. Any reduction in costs can contribute to a better bottom line and more profits for you. You may need to shop around when it comes to vendors and suppliers; a review of your smart POS data can reveal what items are moving best and which ones may not be the best match for your business right now.
The right budget can help you manage your revenue effectively and let you see where your income is going, but a budget is just the start. The more data you have to work with, the better; you’ll be able to more effectively manage your inventory and product lineup and make sure the items you’re buying for your business are truly giving you the results you wan
5 Easy Ways to Manage Operating Costs
The cost of running your business matters – some things are set expenses that you won’t be able to change. Variable items, though, are worth examining to see if you can trim some expenses; every dollar you cut from your costs can make its way to your profits, resulting in more money for you and your business. Trim your operating costs by choosing one or more of the following methods:
- Embrace Technology: New innovations appear every year and if you can use technology or automation to streamline or speed up your processes, you can save a bundle. Whether you opt for a smart POS system to track your inventory or set up automated emails for new customers, taking advantage of technology can make it easier to serve customers more affordably without taking up more of your time or resources.
- Outsource and Save: Entrepreneurs tend to be “take charge, do it all” types, but by outsourcing tasks you are not good at or don’t enjoy, you can save both time and money. From your IT and web needs to your bookkeeping and accounting needs, outsourcing free up enough of your time to end up providing your business with a significant savings. If you’ve been considering hiring an employee to help, outsourcing can cut your costs – you won’t have to pay for benefits, training and downtime when you outsource, just for the work provided.
- Pay Early – or at Least on Time: If your budget is riddled with late fees and finance charges, committing to early payments or at least paying on time can help remove these excess costs from your budget. Those fees do add up, so making timely payments can impact your bottom line.
- Shop Around: Not all vendors are created equally; make sure that deal you struck 3 years ago is still a good bargain today; you may be able to shop around and find a better bargain elsewhere.
- Cancel Unused Services: You may have signed up for a variety of accounts and services when you opened your business, but if you’ve outgrown them or don’t use them, it’s time to sever ties. From subscription services to marketing support, make sure you are truly using every service you pay for; if not it is time to cancel or look for a better deal.
Don’t Be “Penny Wise and Pound Foolish”
This old saying rings true today when it comes to business. Cutting back on needed services or failing to purchase the items you need to keep up with the times could be a costly error. Whether you’re still trying to keep your books by hand or manually ringing sales on an old school paper register instead of a smart POS system you may think you are saving money – but could be holding your business back from success instead. Carefully considering not only what you spend but what areas you’ve fallen behind in can protect you from this common error.
Gain Control of your Budget with a Clover Station
No matter where you are in your business, the data and full inventory awareness that comes from a smart POS like the Clover Station can help you succeed. When you fully understand what you’re selling and how you’re selling it you can make the best possible decisions about your business budget and expenditures. Contact us to learn more about the innovative Clover Station system and what it can do for your business and brand.