It’s coming up to tax time here in Canada, and the US. Pulling together year-end reports on revenues and expenses is, for some business owners, the first time all year they take a good hard look at the numbers.
Bad, bad business owners! At least having to file my GST return every three months forces me to balance my books! If you don’t look at the numbers often, you really have no idea how your business is doing.
Looking at reports will give you that snapshot view, but it doesn’t help you improve your bottom line. You need to be consistently mindful, especially about expenses you can control.
We often practice the art of frugality at home, but not always in our businesses! Yet the frugal business owner can build your business faster, and pocket more of the profits. It’s a less stressful way of owning and running a business, too. If you’re looking ahead and wanting to cut back on your spending and make more money, you’ll enjoy these tips on how to be a frugal business owner.
Tip #1 Free Software and Applications
Let’s face it, there are literally thousands of software products and applications that can help you run your business more smoothly. They range from invoicing software to communication tools. And while you can most certainly pay for these products, there is almost always a free alternative. Many of these free alternatives come in the form of open source products, which can have risks. However, with a little care you can automate much of your business with top-quality technology for next to nothing.
Tip #2 Budget
Don’t have a budget? Create one using one of those free software products or applications just mentioned in #1. Your budget will show you areas where you can cut back on your spending and it can help you keep more money in your pocket.
Tip #3 Analyze Everything
Analyze your budget. Analyze your advertising spending. Analyze your contractors. Anytime you consistently spend money on something, create a system to analyze and assess the results. For example, if you’re spending $500 a month on advertising you probably want to make sure you’re at least earning $501 back from the ad.
Tip #4 Outsource
Why pay someone to do something that you can do yourself? Because it often makes good financial sense. Outsource the tasks that take you a long time to complete and use that free time to focus on business building tasks. Outsource the tasks that you don’t enjoy. Outsource the tasks you’re not as good at.
And while being frugal is good, outsourcing is one area where you might want to pay a little more for a much better job. You truly do get what you pay for! Paying a little more up front, secure in the knowledge that you won’t have to either get someone else to do it again or take it back and do it yourself, can be worth the additional cost.
Tip #5 Barter, Partner, and Negotiate
Instead of always paying for products or services, look for ways to pay less. For example, if you need someone to write a sales page for you, ask for a discount or look for a way to partner or trade with them. You might be able to overhaul their website or market their services to others. Look for ways to establish a mutually beneficial relationship without spending money.
Tip #6 Reduce, Reuse, Recycle
Finally, look around your office and explore ways you can cut back on simple things like office supplies. Can you buy in bulk and save money? Can you reduce your use of electricity, paper, and ink? Can you get a free business phone number with Google, or an inexpensive one with Skype or one of the other VOIP services, and eliminate your monthly business phone bill?
There are many ways a frugal business owner can cut back and save money. Start exploring your options. And TRACK EVERYTHING!