8 Smart Budget Management Tips for the Savvy Business Owner

Generating income is everyone’s goal, but there is no point in bringing more money in the front door when it is going out the back door just as fast.  It makes no sense; you are simply working your tail off to pay someone else’s bills.  But some business owners don’t like wondering what to do with the cash they have on hand.

Let’s face it; the difficult part of your business is budget management. You need to spread your resources evenly, make sure everything you do produces value, and ensure that your bottom line remains intact.

The thought of a monthly budget is enough to put a sour taste in most people’s mouths. No one likes a budget, but it is worse to be broke. By putting a plan in place that cultivates careful spending habits, you can maximize your savings and keep on a healthy financial track without cramping your style.

Here are some smart spending habits to get you started

 1. Avoid shopping on a bad day

They say, don’t go grocery shopping on an empty stomach. Studies show that theory applies to shopping generally, not just grocery purchases. If someone is over-hungry, stressed, anxious, depressed, or simply having a bad day, they will tend to overspend to console themselves. Developing good coping strategies will eliminate bad spending habits and help you save money quickly.

 2. Spend wisely

It’s okay to splurge your resources on specific areas, but you have to remember that every dollar that goes to your business should produce a high return. Think about all the money you can save if you spend only on what’s necessary rather than what’s supposedly expedient

 3. Create a list

Another way you can keep your budget intact is to come up with a list of the things you need for your business. If you are procuring equipment for a home office, you have to come prepared with a checklist of specific items you should focus on. Whether you are using a notebook and pen or apps like Evernote, keeping lists will help you avoid making unnecessary purchases. 

This habit can keep you focused while shopping, saving you both precious time and money. You get the items you came to get while not forgetting an essential item that forces you to make a return trip.

 4. Comparison shop

Take the time to shop around when making a substantial purchase to get the best deal on the market. Keep your eyes open for free shipping offers, rebates, and cashback deals to save even more on the total cost of your purchase.

From purchasing office equipment to hiring a third-party service provider, everything has to be accounted for and should yield massive returns in the long-term. So, before making a deal, get as much information as you can about the product or service and compare it with what other providers are offering. 

 5. Be meticulous with technology

For sure, a bulk of your operating budget could go towards the acquisition and maintenance of technology. Even if you are not so sure about the piece of technology you are using for your business, it helps to ask a lot of questions to vendors.

When buying technology products, purchase what you need to get the job done with a reasonable amount of consideration given to future growth. It is foolish to cut corners so much that the equipment is obsolete in a short time. That may not always require buying the top of the line as you probably don’t need all the bells and whistles. Take time to educate yourself before shopping to make a smart purchase.

You also need to compare rates and review warranty terms. It’s also essential to keep every receipt in case the products you have purchased begin to break down long before the warranty expires.

 6. Keep the box

When you get a new purchase, many people throw out the packing garbage. However, keeping the box for at least 30 days can possibly save you money. Should a problem occur with an item, most stores will take it back or exchange it within a limited time after the purchase date. This saves you the time and frustration of sending it to the manufacturer rather than the nearest garbage dump.

 7. Extended Warranties

Don’t purchase an extended warranty on a product without giving it serious consideration. From an economic viewpoint, it typically doesn’t make sense to buy an extended warranty in most cases. You should consider the reliability of the product and the terms of its manufacturer’s warranty. Should you decide to purchase the warranty, be sure to keep the paperwork in an easily accessible file in case, you need it. No warranty is a good buy if you do not have the information to stake your claim.

 8. Bad Bookkeeping Behavior 

Small business owners who think they’re too busy to keep track of expenses should think again. By not paying enough mind to what gets spent, companies could wind up with less than expected when the final tally comes through. Plus, if business managers don’t know how much they’ve been spending on standard supplies and services, vendors could hike up their rates without raising any concern – a hidden cost of not paying attention. 

Setting up a simple bookkeeping system, whether computerized (preferred) or manual, will prove its weight in gold.  It is an essential tool to know if you are truly making a profit – and where to adjust if you are not!  A good system can also help you get that business loan you need or keep the IRS auditor happy. 

The Business Untangled System can help you implement a system that is cohesive with your personal style.  We are experts at making sure you have less stress, pay the least in tax, and make and keep more money.  Why are you waiting? Contact us today!