It’s so important for small businesses to get the basics right when it comes to expenditure and budgeting.
With fewer bodies and minds available around the office, warehouse, store or site to operate and grow, you need to make the most of every minute and dollar.
Here are a few tips to help you budget around being, well, small.
Outsource and focus on your strengths
It’s not easy for some small business owners to hand over work and responsibilities to people outside the business – or ever people within the company. The feeling is that no-one can do the job as well they can and they’ll end up spending just as much time fixing things up.
If this sounds like you, don’t let one or two bad experiences (or your ego) stop you from taking a crucial step that will allow you to focus on the things you need to be doing – high level management, growing the business, being creative or whatever it is that makes you and your business stand out.
There are plenty of options for outsourcing materials or labour. For example, an online gift store might use their expertise to make the shopping experience great and source exciting products, but outsource customer service, logistics and delivery.
Leasing equipment and IT
Leasing provides you with all the benefits of owning a product, without forking out the whole lot up front. A finance lease works very well for plant and machinery, trucks, cars and other major assets, while operating leases are a great fit for technology.
IT products change and update so quickly – case in point history’s biggest and fastest selling technology made the original iPad redundant, and laptop manufacturers very nervous. As the iPad2 will be when the iPad3 launch has the Apple “fanboys” sleeping out on George Street to get first bragging rights.
Leasing is also smart because computers and vehicles are assets that depreciate at an alarming rate. Instead of being left in the doldrums of a slow, worthless computer network, you simply upgrade. Plus, the tax benefits can be very attractive too.
Other financing options
For items that may be more worthwhile to own, there are financing options that won’t drain the kitty, but ensure you quality equipment. Agreements can be drawn up with finance companies to allow you to use the equipment while you make payments for it.
If you’re equipment is going to retain value for a couple of years you should think about a plan that gives the option to purchase at the end of the payment term, such as commercial hire purchases.
Be disciplined with your budgeting
Once you’ve developed a budget with financing and leasing options within the spending limit, be strict in sticking to it. No matter how well thought out and calculated a budget is, it’s useless if you don’t stick to it.
This is especially important within small businesses, as there’s far less room for error. So inform all people involved in spending so you’re all working to achieve the same financial goals.
If you need some help with your small business financing get in touch with the Zenith team today.