As a small business owner, every expense matters and you should try and reserve your money on activities that directly contribute to the growth of your business. That said, there are almost always areas in which you can shave and help reduce your overall expenses to operate without feeling like you’re making significant sacrifices. In this post, we’ll explore several ways that you can reduce your business expenses and save for what will truly help your business.
Create a realistic budget and stick to it
Creating a realistic budget is perhaps the easiest way to help reduce unnecessary business expenses. By creating a budget and using it as a guideline, you’re less likely to make unnecessary purchases or deal with surprise costs. A good tip is to reflect on your business goals and focus areas for the year and create a budget accordingly. This will allow you to carve out the spending for key focus areas and help you stay on course. In addition, keep referring to this budget throughout the year to see if you are on track and if you need to make spending modifications. At the end of the day, having a realistic budget will provide you with a much better understanding of what purchases are crucial in helping your business move forward.
Another way to reduce your everyday expenses is to go paperless. Instead of printing and regularly purchasing ink, paper, mailing supplies etc., opt to go digital with software such as Sage Business Cloud Accounting and DocuSign. Transitioning to a digital solution will allow you to easily prepare and send digital contracts, and keep track of your invoices, sales receipts, and statements. Utilizing digital platforms can also help save on the amount of physical space you need to store all of these documents, while still ensuring your documents are secure.
Eliminate excess software
Today, there is software for everything. But is there anything that you have implemented and rarely use? Outside of Sage software, consider what software applications you need. Chances are, their free offering may be sufficient, or there are existing applications you already use daily that can support these additional use cases. Avoid getting distracted by fancy software, as the costs can add up quickly!
Say goodbye to your landline
Last but not least, one of the easiest ways to save yourself some extra dough is to ditch your landline. Opt to use your cellphone, VoIP, Zoom or other virtual phone providers instead. Traditional telephone lines are an easy expense to shave, but using a cellphone or virtual phone provider will also allow you the freedom to not be chained to your desk.
Need an extra hand managing your expenses?
If you’re looking for a way to help you manage these expenses, hiring a bookkeeper can provide great relief and allow you to focus on other key areas of your business. Learn more about what a bookkeeper can do for you in this blog post.
Let’s face it, Q4 and the holidays, in general, are the busiest time of year. On top of that, we try to plan our top priorities and timelines for the year ahead. In reality, we often find ourselves running the extra mile to complete what is already on our plate before year-end.
If you are experiencing something similar, do not feel guilty about not having it all together before midnight on new years eve! So much can be accomplished when you return from your well-deserved vacation – it is all about balance. In this post, you will learn tips on making the most of your couple of weeks back at work after the holidays and how to get back to the grind.
Much like the frantic feeling you have before the holidays, it is super common to feel that same way going back to work in the new year. You may have a few loose ends that need wrapping up, or a project is still in motion. Add your goals for the new year on top, and it is easy to feel like a mountain of work. Instead of feeling pressured to complete everything at once, start small. Do this with simple tasks, such as checking our email inbox or orders received over the holidays. While these tasks are smaller, they often are not allotted a designated time to be completed, which adds to the stress. Instead of trying to finish everything you need to do at once, take some time to get back in the swing of these by tackling some easy wins. Allow yourself to recap on where you left off before the holidays, bringing you back-up-to-speed.
Many hands make light work
Another recommendation is to delegate, delegate, delegate! Do you have a team that you can loop in to get some of those pesky tasks off your to-do list? Maybe it is doing a remaining inventory count or re-organizing the office working space. For tasks that do not need specific expertise, involve your team – as the saying goes, many hands make light work.
Review your financials
Now that the basics are off your list, let us dive into ways you can ramp up for the new year. We will start with a key recommendation of reviewing your previous financials! Reviewing your financials will help you identify where you did well and new areas you may want to focus your attention on.
For example, your cash flow statements can help you identify how much you spent the previous year and in what areas. A revenue statement can give you insight into the areas that thrived. Lastly, a balance sheet or inventory statement can indicate if you have too little or excess inventory and if purchasing needs to be adjusted. With all of this information, you can determine what products or services performed, if seasonality came into play, and what will move the needle for your business in the year ahead.
Set your foundation
Now that you have a much better idea of where to focus your time, energy, and resources in the year ahead, it is time to set timelines. While it is good to not apply too much pressure on yourself the first couple of weeks back to work, it is best to have a solid plan for Q1 and use this time to set the foundation for the year ahead. From your findings from your financial review, what needs to be addressed to help your business scale? This could include hiring more staff, implementing new technology, or changing your pricing strategy. By doing the heavy lifting and completing tasks with dependencies, you can truly set yourself up for success for the remainder of the year.
New year, new possibilities
To sum it up, taking the proper time to get back into the swing of things and forming a strong plan with clear goals is the best way to maximize a new year.
If you’re looking for additional ways to hit the ground running in the year ahead, hiring a bookkeeper can help. Take a look at this blog post to see what hiring a bookkeeper can do for you.
Running a small business is no easy feat. Regularly, you are juggling multiple plates in the air; yet are still responsible for making sure everything runs smoothly. With the constant balancing act, it can be a challenge to determine what needs your attention at any given moment. And with the end of 2021 inching closer, the task of planning and prioritizing initiatives in the year ahead add to the mix.
Want to be proactive for the year ahead? Don’t sweat it. In this post, we will give you sure-fire tips on how to prepare for the upcoming year, where to prioritize your time, and how to make sure your goals align so you can hit the ground running.
Reflection is key
To plan for the future, it’s necessary to reflect on the past. Questions you can ask yourself are: How did my business perform this year? What were the highlights? Is there anything I’d change? These are some great questions to get the ball rolling.
Once you’ve had the chance to reflect on the year as a whole, now it’s time to plan. However, you may still find it challenging to determine what initiatives to prioritize and where to focus your time.
Hint – it is not one area over another
Now, depending on who you talk to, every small business owner has a different idea of what to prioritize. For some, it’s marketing, for others, it’s finance, while for others, it’s operations. However, in reality, it should be all of the above. The truth is, all of your business functions are interdependent. And while they may be interdependent, that is not to say you can’t break them into manageable pieces.
A great way to do this is to review all the different functions of your business which can include: operations, human resources, finance and accounting, marketing, research and development and more. While this list might seem extensive, in reality, it is what you take on, each and every day. For each of these functions, you’ll have several tasks that are non-negotiable and must be completed as they are critical for your business. While on the other side, there are activities that may already be on your radar, but you may be unsure of how to prioritize.
Goal setting for your business functions
This is where creating goals for specific business functions come into play. By establishing goals for the different areas of your business, you can operate your business like a well-oiled machine but take smaller steps towards a bigger accomplishment. This also makes it manageable to prioritize your time across different areas of the business without feeling overwhelmed.
For example, after reviewing your yearly financials, you realize you have room in your budget. By taking a step back and reviewing all areas of your business, you can highlight some gaps in your stock and production operations. A primary goal for the year ahead could be to hire an additional employee to help resolve some of these gaps.
Once you’ve established your primary goal, it’s easy to plan a series of actions that follow. For example, if your goal is to hire an additional team member, actions could be to determine the official responsibilities of the role, prepare a job posting, promote the position, interview candidates and onboard a new team member.
While this example is more geared towards operations and human resources, it can easily be applied to other areas of your business. By reviewing the different functions and creating goals and actions for each, you can be more strategic and better determine what activities to prioritize and allocate enough time to complete them.
Work smarter, not harder
If you’re still looking for additional tips on goal setting, make sure to check out our recent blog post, where we highlight how to create SMART goals to help ensure success and stay motivated along the journey.
Today the plates of small business owners are full with juggling the ever-growing number of daily tasks and time they need to spend actively reviewing their business operations and financial statements. However, one area that small business owners should never overlook is cash flow.
In this post, you will learn what cash flow is, the importance of it, and sure-fire ways to help you stay on top of it.
What is cash flow?
To start from the beginning. Cash flow is the movement of money in and out of your business. Unlike revenue, which only accounts for the sale of products or services, cash flow provides an understanding of the net amount you have earned from your profits while taking into account the usage of cash and everyday expenses. To provide an example, you have completed work for a client and have sent them an invoice. While this is a profit, it is not cash, as payment has not been received and funds have not been deposited into the bank yet.
Your crystal ball
Now cash flow has been deemed with the saying “cash is king” since businesses can’t exist without cash. It has also been said to be one of the most important measures of a business’s health.
Similar to managing revenue or preparing a balance statement, managing cash flow gives you a good idea of how your business is performing, but better yet, provides an accurate summary of how much cash your business has on hand at any given moment. By understanding how much cash you have on hand, you can be more strategic in your business decisions.
For example, if your business experiences seasonality, monitoring cash flow can help you determine when to start saving funds in advance for the slower periods or help you discover new revenue opportunities to help compensate for the dip in everyday profits. Another example is you may need to invest in new equipment which you know will be a significant cost. Having a good understanding of where your cash flow stands, can help you determine if you should go ahead with the purchase or hold off until the next business quarter.
Another great reason, and perhaps the most important, is to manage your cash flow to foresee any potential problems before they arise. It’s common for small business owners to get bogged down in everyday tasks and sometimes fail to carve out time to send customer invoices or follow up on payment. Or they do not have the necessary team members in place and fail to realize that they are operating with debt. By quickly referencing your cash flow, you can make better and more proactive decisions for your business and not fall into these traps.
Ways to manage your cash flow
Now that we’ve covered the importance of managing your cash flow, here are some ways to do it!
Prepare a cash flow analysis
The first is preparing a cash flow analysis, which is to monitor all transactions that could impact the cash flow of your business. These include accounts receivable, accounts payable, credit and inventory purchases. A good recommendation is to perform a cash analysis every month, which can be done by combining all unpaid purchases against your total sales or profits at the end of the month. Here’s a calculation that might help:
Cash Flow = Operating Cashflow – Working Capital – Capital Expenditures – Dividends
If you see that you have more expenses compared to incoming cash by the end of the month, this could be an early indicator of a cash flow issue that needs attention.
Create a stellar cash flow budget
Now, if you have committed to doing a cash flow analysis each month, another way to gain better insight and manage your transactions is to prepare a cash flow budget. A cash budget will help you determine the patterns in which money goes in and out for your business. These patterns can typically include one-off expenses, monthly or quarterly recurring expenses and yearly expenses and revenue.
Want to create a cash flow budget for your small business? Check out this blog post by the Balance Small Business.
Don’t go the journey alone
Being a small business owner is hectic enough. If you’re looking for ways to streamline your work, definitely consider accounting software such as Sage, which can help you automatically generate invoices, pay your bill, and even create cash flow statements. If you’re looking for more hands-on support, don’t hesitate to team up with a bookkeeper and see what they can do for you.
October is Small Business Month!
To help celebrate small business month, here are upcoming sessions you don’t want to miss!
Small Business Week at SBBC
Small Business BC is hosting various sessions through October 17th-23rd to help small business owners improve and grow their businesses. With the support of their industry partners, they are hosting in-person and online sessions across the province. Take a look at their sessions here.
Sage Small Business Month Webinar Series
If you’re looking for more information on Sage accounting, make sure to check out their Small Business Month webinar series. These sessions feature industry leaders who focus on trending small business topics and share their advice and best practices to help solve key concerns and challenges for small business owners.
If you’re looking to re-ignite your routine or your day-to-day business operations, take this final quarter as an opportunity to establish new goals and finish the year off strong. To help you make the most of this last stretch of the year, we have put together a series to highlight some goal recommendations specifically for small businesses. In this post, we’ll highlight one goal that may seem straightforward but will help you significantly – leveraging your bookkeeper.
There’s more than meets the eye
Despite misconceptions out there of bookkeepers being a necessary evil or simply being there to crunch numbers, bookkeepers are a source for discussion, advisory functions and financial planning. By changing the way you work and utilizing your bookkeeper properly, you can get much more than just your bookkeeping tasks completed; you also equip yourself with an all-start that truly knows your business, inside and out.
Let’s get into three ways you can start leveraging your bookkeeper today.
Review, review and review
The first way to fully leverage your bookkeeper is to take the time to review what they prepare. Now it’s understandable to think “I hired them to do this work so I wouldn’t have to”, and while that is partially true, the reports that they prepare are extremely helpful to understand the health of your business. Is everything where you expect it to be? Have new areas been identified where improvements can be made? By taking the time to review the documents, you can gain a better understanding of the health of your business and be equipped to make more accurate projections and forecasts, seize new opportunities or make adjustments to your existing operations.
Ask and you shall receive
On the other side of the coin, I’m sure for every business professional including small business owners there have been instances where reports or documents have lacked clarity. By taking advantage of your bookkeeper’s knowledge and asking questions this can become a rare occurrence!
Think of your bookkeeper as your business’s financial advisor. They work day-in and day-out with your financials, making them an additional expert on your team. Your bookkeeper will be more than capable of explaining any financial concept – so take advantage of this!
Be open to advice
Leaning into our last point is asking for advice. While your bookkeeper is an expert in financials, they aren’t limited to only financial advice. Most likely, your bookkeeper has supported numerous businesses in different industries, have implemented software solutions and has taken educational courses to help them with their professional development. If you want feedback or an opinion in an area of your business, they most likely can give you great recommendations based on their personal experiences.
It takes two to tango
At the end of the day, the sooner you stop seeing your bookkeeper, as just a bookkeeper and see them as a financial insider and confidant, the sooner you can reap the benefits. With this in mind, it takes two to tango.
Value them as a key team player
If you’re outsourcing your bookkeeper, or perhaps they are internal but only work limited hours each month, still consider them a key player on your team. Get to know them personally in addition to their work preferences, establish optimal work hours, or set up meetings to keep each other updated or to chat about the business, new ideas and any questions you might have.
Share your goals
By valualing your bookkeeper as a key member of your team and working to grow the business relationship, you’re more likely to succeed. Another piece of this puzzle, however, is making sure to share your goals. This can include short term goals or long-term goals. By bringing your bookkeeper up to speed, and providing an understanding of what you’re hoping to achieve, they can provide recommendations and assist you in the journey. As the saying by Helen Keller goes, “Alone we can do so little; together we can do so much”.
Want some additional tips on how to achieve your business goals?
Check out our previous post on how to create SMART goals that will ensure success.
September. The month where the leaves change, the summer nights start to get shorter and the feeling of a fresh start is around the corner. While many of us are not going back to study this September, the sentiment of “back to school” always manages to linger. Suddenly September starts to resemble January, where new goals, new habits, and new schedules come into place as vacations wrap up and work comes back into full swing.
If you’re looking to re-ignite your routine or your day-to-day business operations, take this final quarter as an opportunity to establish new goals and finish the year off strong. Maybe your goal is learning how to delegate, managing your cash flow more effectively, or just finding ways to be more productive, regardless of your objectives, goal setting and implementing the necessary steps is key to ensuring your success.
Turning your daydream into a reality
We’ve all been there. At the turn of a season, it’s so easy to expand your list of to-dos and daydream of everything you hope to achieve for the remainder of the year. And while it’s great to have a list of ideas and what you’d like to see for your business, having a clear goal and a plan to achieve it will be detrimental to your success.
Without a plan, it’s easy to get distracted by other work and not prioritize the proper steps to achieve your goal. And while your plan may vary for each goal, creating SMART goals can ensure your success.
Work smarter, not harder
Whether you’re a new business owner, or you have been successfully operating for years, utilizing SMART goals is a great way to create realistic expectations of what is required to achieve your goals. Not only that, it provides clear instructions and a timeline to help you stay motivated during the journey.
So what do SMART goals stand for? SMART stands for Specific, Measurable, Attainable, Relevant, and Time-Bound. Let’s get into it more with the example of wanting to be more productive.
Be specific in what you want to achieve
To kickstart your SMART goal, the first step is to identify your desired result. What’s most important in this stage, is to be specific. For example, instead of “I want to be more productive” imply an action such as “I want to implement a new time log system at work to help me better track my time and complete my daily tasks in 8 hours, reducing how often I work overtime.”
How will you measure progress?
Once you’ve specified what you want to achieve, the next thing to consider is how you’ll measure your progress. This will help you stay motivated but will also help you determine when you’ve officially completed your goal. How you track your progress can vary on your circumstances, and your goal, but deciding on a specific metric will make it easier to track your progress in a way that makes sense to you.
Shoot for the stars, while remaining realistic
Now that you’ve determined what you want to achieve and how you’ll measure your progress, does it seem achievable? If it’s not achievable, what can you address to make it happen? Off the bat, your goal shouldn’t seem impossible. While you want a challenge, you want to remain realistic and set yourself up for success.
Relevance is key
Another component of a SMART goal is ensuring it’s relevant to you and your existing goals surrounding your career trajectory or your business’ success. Look at using these individual goals as stepping stones to achieve a larger milestone. This makes it easier to push forward and also helps establish the bigger picture.
Timing is everything
Last but not least, the final component of your goal is time. Set a realistic timeline by which you’ll achieve your goal. By providing a realistic deadline for yourself, you can also set benchmarks and endpoints.
Additional tip! Writing down your goal is a great way to provide additional motivation and make a deeper commitment to your goal. By recording it on paper, you’re already taking the first leap to make it happen.
Now that you’ve learned how to set a new goal – what will you achieve next?