Things are tough for many businesses right now. The sudden economic shutdown in the spring has moved on to stuttered reopenings this summer. While the government’s PPP Loans have been helpful to those who applied and received them (see our update here), for many those funds are slowly coming to an end. Business owners are looking for ways to stop the financial bleeding.
BUDGET CATEGORIES WHERE YOU MAY BE OVERSPENDING
Here are some common budget categories businesses often overspend that may be a help to you as you seek to strengthen your company for your post-pandemic business plan.
THE LATEST AND GREATEST TECHNOLOGY
We all love the feeling of opening up a new computer or smartphone and setting it up just how we like it. It’s empowering—we feel like we can accomplish anything with this new tool. I mean, you wouldn’t ask a mechanic to fix your car without tools, right? So don’t you need this electronic tool to do your business? Not necessarily.
You first need to weigh your needs and only upgrade if you can see a substantial benefit. It may be helpful to ask other business owners their thoughts so as to get an objective opinion before you make any decisions to buy or not to buy.
Devil’s advocate note: it may be that you’re spending entirely too much money keeping old technology on a lifeline. If that accurately describes some of your tech, it may be time to look at upgrading—though the best of the best still likely won’t be necessary. Emailing clients and updating your company blog doesn’t need the top-of-the-line Mac Pro ( I just looked up the price of the maxed-out machine and it was $54,447.98!).
UNUSED SUBSCRIPTIONS AND SERVICES
You likely have some things you’ve signed up for over the years that you no longer need. Let’s all say an ode to the landline….
Now that we’ve got that out of the way, let’s think about other online services or subscriptions that you’ve signed up for with the best intent of using, but over time you stopped using them, and then forgot you were paying for them. At this point, it would be good to take a deep dive into your credit card statements and see if there are any recurring charges that you need to send to the grave.
Examples might be Office365 addons, website plugin or theme subscriptions you no longer use, website hosting services that aren’t being used, paid email marketing services when the free version works for your needs, top tier CRM services, trade magazines, newspapers, etc.
MARKETING THAT IS TOO BROAD
The old marketing tactics of buying an ad in the newspaper or similar publication are far too broad for today’s market. It’s like spraying the forest with bullets when you’re just trying to snag a single buck.
Precise marketing is the name of the game today. You can be quite precise with your online marketing and it can be done cost-effectively. If your business sells running shoes, you likely don’t want the bulk of your marketing dollars going to nursing homes or to preschools. You want the people who would utilize your product (and pay for it) to be the ones seeing your marketing materials, whether they be your website, brochures, or online ads.
Focusing in on your ideal market is much easier to do with the online tools we have at our disposal today. While you can get awesome results doing this with the help of a marketing expert, you can even get good results utilizing online resources yourself. Cutting this one category, or rather narrowing in on your actual market so you can spend less while getting more, can save you loads of money over time.
UNNECESSARY OFFICE SPACE
For many of us during this pandemic, we’ve had to learn to work from outside the office for an extended period of time. And for some of us, we’ve found that there are some real pros to working from home! It may even be that you are considering the move to a decentralized office where your staff does the bulk of their work from home, allowing you to downsize your office space and save on rent, utilities, and insurance.
But even if you’re not ready to make the leap to working from home as a company-wide venture, you may consider reducing your office footprint or moving to a less conspicuous location. Do your clients regularly come to your office? If so, do they ‘expect’ the size and location you’re currently offering? It may be that your particular field does attract customers who do expect a certain level of pomp, but it may be that your clientele are wondering why they’re paying you so much if you’re just spending it all on bobbles that don’t add value to them.
An in-between option is utilizing a coworking space. This is where you can have access to shared conference rooms, minimal office space, and some administrative services. This would allow you to have a physical office address, as well.
No matter what your business is, there are always areas of the budget that can be trimmed up. If you need help identifying these areas, don’t hesitate to reach out to us! We here at CRS CPA are experts at understanding your finances and we can help you identify where you can cut and give you ideas for keeping a tight ship during lean times. You can call us at (888) 272-7102 or send us a message on our website. We look forward to adding value to your business!