5 Worst Budget Breakers For Small Business
Running a small business requires constant attention to the details. The constant creep of uncontrolled expenses can cause your business to run inefficiently and can nibble into your profits. Many business people recognize 6 hazardous areas where costs can quickly go out of control. Managing these 6 hazards can help to keep your business on track for high profit margins.
Every businessperson knows that payroll can suddenly balloon out of control during busy periods. Many entrepreneurs delay adding employees because of increased costs, and then find that the overtime cost to current employees far surpasses what a new, regular time employee would add to the payroll. If necessary, fill in gaps in the work schedule with part-time or temporary employees, and invite good workers on as full-time employees when needed.
Advertising & Marketing Costs
A small business may need to spend heavily on advertising to compete locally or to ensure that its website is getting appropriate rankings in computer searches. Advertising in newspapers and neighborhood fliers are recurring expenses that can add up to a lot of money each year. A semi-annual review of advertising results will help you to determine if the advertising plan is reaching your target customer. Make changes when necessary to keep these costs in line.
The cost of everyday supplies can create a significant dent in your quarterly or annual budgeting when costs continue to rise. Many entrepreneurs make the mistake of becoming “buddies” with suppliers and then find them stuck paying high costs for items they use every day. This hazard can be avoided if you are up-front with a company policy of reviewing supply costs on periodic bases, such as at the first of the year. Then, your salesperson/buddy will know, in advance, that he will have to offer a price break or other benefit to keep your business.
Small businesses must carry a number of different types of insurance for general liability, employee injury compensation, vehicle insurance and health insurance. Because entrepreneurs often juggle many tasks every day, insurance expenses can be overlooked until the premiums reach a shocking level. Take the time to mark your calendar for policy renewal dates. A month or two in advance of that date, begin to get some quotes from local insurance agents. A little time taken during the year to reduce your insurance premium expenses can help you to save money over the long term.
Maintenance can cover a wide range of areas from janitorial services to equipment repair. Even IT maintenance and repair can increase as computers and peripherals age. Year over year, these costs can become a significant part of your expenses. Every 6 months, you should review the current costs for these items and get a few quotes from new vendors. Assess the lifespan of computer equipment and determine if it’s time to replace the item for a newer model with more features and fewer repair costs.
RetailBlue.com is an online retailer supplying Computers and Printers to Small Business in Australia.