When you are running – or thinking about running – a small business, it is absolutely essential that you consider costings, what you can do to minimise spend, and how you will survive should you encounter a financial shortfall of any kind. Planning ahead is not always easy, nor is it often simple, but preparing for future eventualities and having an idea of what you would like to achieve going forward is absolutely essential if your company is to thrive. Budgeting adequately can be the difference between success and failure, so with that in mind, here are three key budgeting tips that will ensure your business goes from strength to strength in 2020.
1. Have an emergency fund in place
You never know when you’re going to be hit with an unexpected cost – a boiler repair, a supplier going into administration – so it is vital to have money stored away to deal with unanticipated problems as and when they crop up. An emergency fund will mean that you aren’t scrambling around for money if a disaster happens, and will also mean you won’t have to dive into your own personal savings.
2. Think carefully about the return on investment
When you make any sort of purchase or decision related to your business, you should always be considering how it will help you financially in both the short and long term. ROI should always be one of your primary metrics for success, but be aware that the strategies that bring about strong ROI are not going to be the same month on month, so you will need to keep analysing performance and updating your approach continually. Are you going to focus on social media marketing? Do you need to purchase new products? Should you be offering different solutions? Should you put together an email campaign for existing customers? Consider ROI, budget only what you can afford, and don’t be afraid to try new approaches.
3. Consider overall business-wide spend
Have you taken a detailed look at everything you spend your money on each month? Are you signed up to the best broadband deal possible? Do you pay too much for heating and electricity? Are there pieces of software you pay for but don’t actually need? Are you purchasing too much from clients, or struggling to fulfil orders from customers? Analysing your outgoings and incomings can, ultimately, help you perform better, and can save you masses of money quickly.
Key budgeting tips for 2020 – where to find out more
Tower Leasing have supported the investment and growth of over 40,000 SMEs. No matter what your plans are, we have the business finance products in place and the expertise to help you see them through, whether your finance needs are for cash flow, equity finance, asset purchase or technology. Please get in touch with us today to find out how we can help. You can read more about our finance solutions on our website.
