Easy Money Saving Tips in The New Financial Year for your Small Business
Business plans and financial forecasts are a given for most small businesses, but they’re not the only way you can make sure that you’re saving money and cutting costs. Since unexpected missteps and pitfalls are part and parcel of being an entrepreneur, it’s worth knowing exactly how you can put yourself in the best financial position possible.
Here are our best money saving tips and cost cutting advice for your small business in the new financial year.
1. Plan, plan, plan
Financial planning is a must for any small business, and it pays – literally – to approach your planning through a logical series of steps. If you’re starting from scratch, a simple way to structure your planning process could be:
(1) take inventory of where your business is right at this moment,
(2) define what you want to achieve in the next twelve months – for example, how much growth you want, and
(3) know what you will do to achieve those goals.
Consistently, small businesses that use financial plans and track budgets report better outcomes.
If you need some help starting your business plan, check out our business plan: recipe for success.
2. Build your network and learn from them
There’s a lot you can gain from a good professional network, including financial tips and guidance.
It follows that the more extensive the network, the more access you have for help and support. This could include potential advisors, customers or partners, just to name a few.
It doesn’t matter what stage your business is at, nurturing this network could help you cut costs significantly by turning your time and skills into currency.
Just talking to your fellow professionals in a casual setting could help too. It could help you understand how to build better business plans and financial forecasts, as well as prepare you for what to expect on your business journey, particularly if you’re talking to others who have started similar small businesses or advise small businesses.
3. Set a goal to issue your invoices earlier
Invoicing won’t be anything new to you as a small business owner, but it’s important to get into good habits with them if you haven’t in the past.
Modelling your behaviour on what you’d like to see from others will not only encourage them to do the same, but it can help you out financially.
When you’ve completed a job, invoice for it as soon as you can – the quicker you do it, (typically) the sooner you will get paid. On top of this, if the client doesn’t hold up their end of the deal, there’s nothing wrong with following them up with a friendly reminder.
4. Keep a close eye on your spending
It can be tempting to go all out when it comes to spending, and one area in which small businesses often overspend is marketing.
If you’re a small business with limited resources and expertise, you might feel like you need to put your trust in an expensive agency – but trial and error with smaller amounts of money is the safer option, until you know exactly what strategies see a return on investment.
After all, just pumping money into advertising doesn’t guarantee sales. The same goes for other areas of your business, whether it’s for office décor, professionally designed websites, merchandise, or anything else.
Keep track of your spending and don’t hesitate to rein it in if need be.
5. Free up your time
Work smarter, not harder: free up as much time as you can to work on the essential tasks required to grow your business.
Setting boundaries and knowing how to spend your time efficiently is key. For example, consider setting deadlines for all your tasks and staggering them, even if an official deadline for multiple tasks is the same. Try prioritising the order in which you address ongoing tasks – for example, only checking your email at certain intervals in the day rather than on-and-off for the whole day.
You could also automate your bank feeds, so it works with any accounting software you use (for example, Cashflow Manager) and create templates for documents you create regularly – like invoices, emails, or letters.
6. Use resources, tools and apps
Hiring employees is the traditional go-to for small businesses looking to expand their services, and it makes sense. If you don’t have the expertise, find someone who does.
But while that can be a great option, especially in the longer term as your company changes and grows, it doesn’t always make the most financial sense in the short term.
Ask yourself what it is you need: do you need some simple graphic design work for a short-term campaign, or do you need a graphic designer?
There are usually free (or affordable) tools or apps that can help you with some simple business tasks – whether it’s straightforward graphic design programs to help you create social media assets, like Canva; task management software, like Trello or Notion; or simple yet powerful accounting software, like Cashflow Manager.
7. Know your tax obligations inside and out
Understanding your tax obligations is crucial for a small business owner, as you don’t want to face penalties or fines down the track.
And, better yet, knowing what you’re required to report – and what you’re entitled to – can also lead to some real savings. Do your research, as there might be business deductions you weren’t aware of. Consider hiring an accountant (and/or using accounting software) to make your life easier.