If you're a business owner, I bet you’ve been told you should be forecasting. This traditional advice suggests that there is a specific model to follow or a manual to use. However, as you and I both know, the reality is that when life gets in the way, your forecasting...
Are Your Expendable Expenses Dragging You Down?
Accounting and bookkeeping services can go a long way toward helping your small business get its finances in tip-top shape. However, just like your personal trainer can’t actually do all that cardio and weight work for you, you’ve got to do much of that financial heavy lifting yourself.
One way many small business professionals impede their growth is by piling on a whole host of unnecessary expenses. Some of these expenditures are luxuries you almost certainly can do without. Other unneeded outlays are counterproductive, inapproriate or repetitive. Sometimes an expense is necessary but a little too high. Other expenses are just, quite simply, not smart.
Let go of luxuries
One colleague is a woman with a deep appreciation for fancy coffee drinks. Every day on her morning walk, she would stop in and plunk down upwards of $5, and sometimes again in the afternoon. At five bucks a pop, it might not seem like a damaging indulgence, but it adds up—quickly. One day she did the math and realized she was spending more than a hundred each month, so she put the brakes on her habit. She’s since purchased an AeroPress to make cappuccinos at home for pennies a cup. The money she spent on java is instead going toward credit-card payments and other necessary bills, and she hardly misses her barista at all.
If you (or your accounting and bookkeeping services) take a fine-toothed comb to your list of regular expenses, you likely will find unnecessary expenses that can be eliminated, or reduced via substitutions. Are you springing for a Keurig when automatic-drip will do? (Keurig cups equate to over $30/lb for coffee.) Do your trips to the airport take place in a Lyft or taxi, or in a stretch limo? Are you paying for subscriptions to newspapers and magazines you don’t even read? Or software you don’t use? Pinpoint and eliminate these “extras”; you’ll be surprised how much more is in your accounts at the end of the month.
Open up negotiations
Frequently the companies you do business with are willing to work with you to help you attain a more appealing monthly bill. Cable, internet providers, credit cards and the like all have been known to be open to negotiations to bring those numbers down. It might seem counterintuitive, but companies like Xfinity or Visa may happily agree to accept less money from customers like you. They want to keep your business, and they know you might switch to one of their competitors if you’re not happy. Therefore, they likely will trim a bit off your rate to keep you in their fold.
Granted, the service provider in question might say no, but asking doesn’t hurt (and it’s free). To increase chances of success, keep a few things in mind. One, your odds of getting a discount increase if you’ve been paying your bills on time. Remind the representative they’re talking to a loyal, long-standing customer. If they do say no, find out if there’s an obstacle to getting that rate cut (like a missed or late payment). If so, remove that obstacle (i.e. pay on time for several months), then try again.
One company that turned to MSBP for its accounting and bookkeeping services was an absolute wizard at delivering its core business. As all ambitious small business professionals do, this organization looked for ways to grow its client base. Their initial tack was to spend five figures annually on a high-end digital marketing package. It sounded like a great plan, until at the end of the year they looked at the numbers. Despite costing as much as a small car, the marketing plan hadn’t gifted them with any new leads or accounts—one very pricey goose egg.
In addition to ensuring your expenses yield results, a small business professional should examine its customer accounts and make sure these jobs are profitable. Examine your invoices related to a particular customer and weigh them against the time and supplies expended. If after this financial sleuthing you discover you’re breaking even or in the red, you might want to consider saying goodbye, or at least looking for ways to turn the account around and make it more profitable. This is another area in which accounting and bookkeeping services help find solutions. It’s easier for experienced financial professionals to spot such problem areas, leaving you to focus on other things like providing your core services and product.
MSBP has years of experience helping small businesses like yours plug financial leaks and better managing their expenses and accounts. If you’d like to know more, feel free to reach out to me at Daliah@MySmallBusinessPro.com—I’d be happy to help.
What solution can Fritz Financial find for you?
Schedule a meeting with Daliah Fritz