Achieving business goals requires planning and that means wise use of limited resources. Judicious use of cash is especially crucial. As businesses grow beyond startup, aggressive past spending in the launch phase is replaced with a focus on sustainable spending. The entrepreneur who lacks a plan has cash flow delusions yielding an unjust confidence.
Mounting expectation of benefits from cost-cutting initiatives is soon confronted by the task of measuring results. Budgeting is a tall order for a micro operation comprising one or two people. But even operations of this size should move beyond superficial financial data. Side-by-side financial statements of multiple periods show the impact on profitability of specific expense category alterations.
Outsourcing tops the list of advantageous cash allocation. Contracting with outsiders for everything from bookkeeping to maintaining website and social media platforms typically minimizes cost and eases administration. Unless you have a location-based shop for customers, ditching the superfluous landline phone is certain to benefit the bottom line. Self-employed professionals and freelancers can use only cell phones.
If you’re not already a paperless operation, making the move to computer-based document storage is a key cost containment technique. Plus, it reduces clutter and keeps you organized. When additional equipment or furniture is needed, buying used is often just as good as shiny new stuff and saves a bundle of cash. The optimal way of minimizing costs is examining your financial statements at the end of each month. Taking time for this permits identification of excessive expenses and monitoring of cost reduction progress.
The Finance Writer 