As an entrepreneur, you’re the boss of your own show. Though it can be beneficial having the means to make your own choices and set your own hours, there are other responsibilities that need to be considered. This includes the sole responsibility of being able to effectively manage your company finances. If you’re like most entrepreneurs you have a small budget to operate on, particularly if you’re just starting out.
Learning how to monitor your spending and make adjustments as needed will be imperative to having the necessary funds to run your business. By finding ways to save, you can improve your company budget, thus allowing you to apply your financial resources to growing your business further. Below are some suggestions on how to accomplish this:
Review Overlapping Expenses
When you’re working from home your personal finances tend to coincide with your company expenses. While you don’t have the financial expenses of a brick and mortar business, you still have the responsibility of paying your mortgage, utilities, and phone and internet bills in order to work each day in your home office. Finding ways to cut back in areas that cause your household and business expenses to overlap is ideal. Here are some suggestions on how to save:
Mortgage – You don’t have a separate lease for your office. However, if you don’t pay the mortgage, you have nowhere to operate your business from. There are some things that you can do to lower the costs of your mortgage payments. These include:
- Refinance or modify your loan terms
- Find ways to save on insurance (for individuals who have their mortgage and homeowner’s insurance tied into one payment)
Utilities – One of the most costly utilities are gas and electric. They are necessary in order to operate but can get out of hand since you’re home all day and constantly using energy. There are several ways in which you can save money on your energy costs. These include:
- Assess your consumption – Sometimes you may not be aware of how much energy you’re consuming during the day. Complete an evaluation of your use. Do you leave the television on? Do you forget to turn off lights? Are you leaving devices on that are not in use? If so, changing these few practices can help to cut back on the cost of your energy.
- Switch energy providers – Thanks to deregulation in the energy market, consumers in the US and Canada now have the freedom to choose their service provider. By shopping around and reviewing the costs and value of various energy suppliers in your area, you can save a reasonable amount of money. Click here to learn more about deregulated energy plans.
Many entrepreneurs utilize their home phone (or mobile phone) and home internet connection to conduct their business. While this can be an effective way to save on business costs, because you’re utilizing each of these services more often, the costs may go up. Some ways to save in this category would be to:
- Shop around for more affordable services
- Consider bundling your phone and internet services for additional savings
Determine Where You’re Overspending
Next up, you want to do an evaluation of your business expenses. You may come to find out that you’re spending unnecessary money that could be used towards something else. Below are some areas that you might consider viewing carefully.
Marketing – marketing is certainly a valuable concept of running a successful business; however, thanks to modern technology you don’t have to spend as much on marketing. There are tons of free platforms and marketing strategies such as social media that can be utilized until you have the means to invest more.
Office Supplies/Equipment – there is no need to invest in fancy office supplies and equipment in the beginning stages of your business. While you do need to be comfortable in order to be productive, you could just as easily be comfortable in used furniture and refurbished equipment as you can with something new. If you’ve been ordering top of the line supplies, cutting back and looking for more affordable options is suggested.
Inventory – Having enough products on hand to offer your customers is important to your business. However, keeping too much inventory in stock could be costing you money. Consider the fact that there are costs associated with storing the inventory if and until you get rid of it.
Running a business from home will present its challenges, especially when a lot of your personal and business expenses overlap. However, if you’re carefully monitoring your expenses and periodically looking for effective ways to save, you’ll find it a lot easier to manage. Hopefully, these tips will help you to get things in order around the house and in your office. You can then use the allocated funds to invest in your business for its continued success.