5 Ways to Keep Costs Under Control As Your Business Scales
Growing a business isn’t as simple as launching a high-ticket product and placing vague estimates around costs. With the rising cost of goods and services and instability in the labor market, it’s challenging to pinpoint where expenses will land.
But it’s possible and oh so necessary.
Inflation isn’t dropping anytime soon, so it’s unclear where things will stand. But, not managing your costs can be the difference between going under financially and finally scaling your company. So don’t worry; below are ways to reduce business spending roadblocks that stand in your way and achieve projected growth.
Automate Your Accounts Payable
Say you’ve been managing accounts payable manually for some time. Your mountains of spreadsheets manage payroll, vendor payments, and inventory. But somehow, your team found themselves in a deficit and unable to pay your vendor for the consecutive months.
Now that you know how much “in the red” your business is, you try to pinpoint where the money went. Accounting can’t come up with a straight answer because your employees have been scanning several different spreadsheets.
Before you call yourself in, you decide to get everyone on the same page (pun intended). You’re frustrated that your company hasn’t been accurately managing expenses because of multiple touchpoints.
Don’t throw in the towel yet. The solution to your problem isn’t more meetings or covering extra action items. Instead, your business could be lacking steady automation that could simplify invoicing.
Finding the right automation service is a no-frills alternative to unnecessary meetings, paperwork, and headaches. This service should have integrations that connect your team's documents and work well with your programs. With the right tool in place, you can stop throwing money out because of the slog and unpredictability of handling accounts payable manually and invest more money in your business.
Streamline Your Thinking About Important Business Functions
Your company has been using a popular internal software to onboard new hires for the last few months, and the process has been a breeze. However, months into using this new software, you’re aware of the initial costs of purchasing this product, but you haven’t calculated how much it will cost you over the long haul.
One thing is for sure: you know that this software has onboarded new hires, organized their paperwork, and saved your company considerably. As a result, sales have doubled, and profits are through the roof.
However, you’re uneasy because you don’t know how much revenue the new installment will potentially cost across its lifetime. So you could continue to ignore the future expenses related to new developments and features.
Or you could calculate the money that your company will use as an asset.
Deciding to classify it as an asset instead of an expense gives you the advantage of seeing how much money will come out of your pocket. With every upgrade, you’ll see how much money you’ll spend using the lens of depreciation and amortization.
Using a time tracking system is a great way to understand how the time your team is spending on the resources being expended and if that can be made more efficient.
Use SEO to Eliminate Big Ad Spends
When people search for their next favorite restaurant, they often turn to the “almighty" Google. They see the five stars, the glowing reviews, and human pictures, and now they’ve won a potential new customer.
And they’ve saved a ton of money using organic search. The ad industry is not only competitive but extremely expensive. This year alone, companies expect to shell out around $566 billion to attract more customers to the business.
Fortunately, restaurants (like other businesses) don’t have to secure dependency on paid search when organic search is at their fingertips.
The only catch is that instead of money directed at advertising, you’re getting people to discover you and conduct business. In other words:
SEO - Ad Spends = Cost Control
Control Spending Creep
Even your best employees could fall prey to sketchy overspending streaks. For example, if they’re using business for a marketing campaign, but you found a trail of Starbucks charges, you could cut down the cost by setting firm limits.
Before you have to print out the bank statement of project spending, you should begin with planning. First, consider what materials are genuinely needed (like inventory, vendor charges, software development, etc.) and what items are luxuries rather than necessities.
Next, start brainstorming what the cost will look like? But, again, this isn’t the point where you land on an exact figure, just an approximate number.
When you finally arrive at the budgeting stage, you can start to position every dollar in its proper place. Instead of relying on heavy spreadsheets to manage your budget, you could issue your team a business card. The beauty of having an expense card to control costs is that every spend will be a click away when it comes time to monitor expenses. Having a database of spending and fees comes in handy when looking to manage individual employee expenses.
Use Data to Predict Expenses
If you haven’t taken a peek at your data, you might not understand your spending trends. We're not just talking about the vendor updates, the inventory, or the payroll that’s to be expected.
You could be losing money by miscalculating how much a product costs, relying on paper receipts, and failing to incorporate travel and products into total costs.
And we understand. It’s not fun to input every expense line-by-line into a spreadsheet, gather data around those expenses, and make the change.
By the time you’ve done all of those steps, I’m sure another spend has occurred, which has added a couple more zeros to your budget.
But, you can make your life a lot easier by gathering information about your expenses even before it happens. Imagine having an easy-to-understand dashboard that shows you every increase in spending with full access to your reports at your fingertips. With that tool available, it’s much easier to pull back data that helps you predict fluctuations in revenue and better control costs.
Business spending, much like today's economy, has become quite unpredictable. With the rising cost of goods and services and the shifting labor market, it’s unclear what your company will expect moving forward. However, if you find yourself consistently over budget and wondering where you can reduce costs, you’ve come to the right place. We hope you get a clearer picture of where your money is going so you can cut costs and considerably scale.