If the last two years have taught us anything, it’s that no one can predict what the future holds. Cast your mind back to the end of 2019 and economic experts were discussing a ‘potential economic upheaval’ in 2020 and 2021 - no one could have foreseen the pandemic and its worldwide impact on the horizon.
For small businesses, the future always holds a level of uncertainty, but with proper budgeting and planning, SMEs have proven they can weather any storm.
That being said, life as a small business owner can be go, go, go, particularly on the other side of a pandemic, leaving little to no free time to devote to meticulous planning on a regular basis.
At takepayments, we’re here to help, with our five must know and easy to implement budgeting tips for small businesses, plus some handy hints for you to have in your arsenal both now, and in the future.
We all know the old adage, proper planning prevents poor performance, right? This is small business 101 when it comes to budgeting for the weeks, months, and even years to come.
If you don’t already have a business plan, there’s no time like the present to put one together. This doesn’t need to be pages and pages but even a rough outline of your current and projected income and expenses including when you expect to receive and make payments can do the trick.
Top tip: If you’re not sure where to start you’ll find heaps of resources online including templates and outlines to guide you through the process.
By putting this information on paper or within an online document, your projected forecasts and goals will be solidified, giving you a clear idea of where you’re at and where you’re aiming to be.
Not only that but whether or not you’re heading to hit or miss financial targets, and where you can pinch some pennies will become clear, allowing you to change course and avoid going over budget ahead of time.
You’re no doubt aware marketing is one of the most important aspects of business - it’s what brings in new consumers, turns first time buyers into repeat customers, and ultimately impacts revenue.
There are so many avenues to consider when planning your marketing strategies in 2021, some that’ll cost you nothing but time, and others that can set you back a pretty penny but have the biggest impact long-term.
For small businesses, choosing which routes to take can be the hard part, but have no fear, at takepayments we’ve taken the hassle out of the process and put together a comprehensive guide to marketing your small business on a budget.
When it comes to your marketing budget, always remember it costs on average ten times as much to acquire a new customer than it does to keep an existing customer - so if your marketing budget is tight, focus your energy on upping customer satisfaction and ultimately loyalty.
Remember: Loyal customers spend more with businesses, have larger basket sizes on average, tell their friends and family about you, and have the biggest impact on revenue.
Loyalty schemes, post-sale follow up emails, and maintaining a presence across social media are nifty and low-cost methods for achieving customer loyalty.
Every small business owner has been in the situation at least once of receiving a bill for a higher amount than anticipated - it’s a daunting situation, and suddenly it can seem like your cashflow is heading for the red.
To avoid this budgeting headache, a clever workaround is to always over-forecast your bills by 10% as part of your business planning. That way, if a bill is higher than anticipated, you’ll have a contingency pot ready and waiting to cover the cost and your budget won’t take the hit.
It’s rammed down our throat as consumers that we ought to compare the market and save money on our utility bills - and the same principle applies in business too!
Whether it’s your electricity, water, payments provider, internet, or even premises, there’s always cost savings to be made by shopping around and getting the most bang for your buck, and all these savings can be funnelled right back into your business budget.
For utility bills, one of the big online comparison sites will find you the best deal on offer and even complete the switching process for you. If your business rent is creeping up year on year, try negotiating, consider looking for a lower-cost option or even weigh up the savings to be made by moving to a co-working space if this suits your business operations.
When it comes to payments, make sure you’re not being stung by hidden fees and higher transaction costs than you ought to be paying. For small businesses, in particular, check you’re not paying the same rates as bigger organisations.
Remember: At takepayments, we’re firm believers that no two businesses are the same and their payment plans should reflect that. Check out our Switch & Save service to see if you could cut down costs.
As with all areas of business, managing your budget isn’t a one time only job, it’s something you need to go back to on a regular basis to see the biggest impact.
Go back to your business plan regularly, once a month if possible but at a minimum once a quarter, and check what costs are higher or lower than expected, analyse your sales figures, and make adjustments for future months where necessary.
Keeping your finger on the pulse in terms of sales data is super valuable when it comes to budgeting - if you know there are certain periods where sales slump or soar, you can adjust your forecasts to reflect this and avoid a shock when you next check the numbers.
Pinpoint sales data will also allow you to identify areas for improvement so you can tweak your marketing tactics to up income during quieter times.
Good to know: Our market-leading EPOS systems allow you to track sales by employee, day of the week, time of the day and channel - perfect for evaluating your teams' performance, product popularity and key selling times.
No one knows what the future holds so it’s always wise to plan for a rainy day and you can do this for your business budget by starting an emergency fund while times are good.
For example, if you have a particularly buoyant sales month, put a percentage of the takings towards the fund, or if you negotiate a new deal on your bills, funnel a percentage of the cost savings into your nest egg.
Whether it’s an unexpected cost, a natural disaster, or even a global pandemic, your emergency fund can help your business bounce back pronto.
If you’ve got plans for the future of your business that’ll require a financial injection, apply for the financing while your cashflow is looking healthy - even if you don’t intend to use it right away.
We’re not suggesting taking out a loan ‘just in case’, but flexible financing like a line of credit or a business credit card that you can choose to use or not is easier to get your hands on while your bank balance is strong.
Applying when your numbers are in the best position will allow you to secure the best possible rates, and this could pay dividends on your budget down the road.
While there are plenty of budgeting tactics you can implement on your own, there are some things better left to the experts. Your business is unique, so not every cost-saving avenue is going to be the right fit for your plans and needs.
Hand over your data to an accountant and you’ll get tailored advice on the best course of action to meet your goals, as well as personalised insights on how you can budget better.
Good to know: With a takepayments EPOS system, accounting packages like QuickBooks, Sage, and Xero are integrated, and you’ll get automated reports that you can send straight to your accountant.
To learn more about any of the takepayments services and solutions discussed in this article, reach out and chat to one of our friendly experts today.
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