5 Ideas to Help Your Business Keep Money in the Bank
Wednesday, November 16, 2016, 6:00 AM | Leave Comment
One sad fact is that many businesses run into serious money problems without any way to alleviate sudden unplanned for expenses.
This is one of the reasons, as Forbes explains, that as many as 80 percent of companies fail within the first year and a half.
Instead, a company needs a good financial cushion in the bank to help it survive some of the hard times most businesses are sure to encounter.
Below are five strategies you can use to help your business save money.
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Have a Plan to Keep Funds in Reserve
First of all, you must have a plan to keep the cash you need in reserve for when you need it in the future.
Typically, you should have enough in the bank to pay three to six months of your bills to continue operating your company.
Before you spend your profit on a new car for yourself, certainly make sure that you have enough in savings to allow your business to survive a crisis.
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Stay Out of Debt
While business loans may have given you the capital to launch your company, you need to pay those loans off quickly and avoid taking on anymore debt.
Debt is something any business, or any person for that matter, should avoid. Debt is essentially paying to use someone else’s money in the form of interest and fees. It’s only a profitable endeavor for the lender.
If you amass too much, you may be forced to go through business bankruptcy. That’s certainly something you do not want.
If you’re currently in debt, though, make sure to be making monthly or bi-monthly payments. You could even pay more than what the payment agreement was as to help you pay off the loan quicker.
If you’re having trouble paying it off, make sure that you talk to a legal representative who can help you understand your options—such as the Houston business debt collection attorneys.
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Cut Back on Company Events and Travel
To free up cash so it can be placed in reserve, you shouldn’t be spending money on the things that you really don’t need.
Big lavish corporate events can really set you back financially. Traveling for company purposes can as well. In fact, the business travel market has ballooned to over $1 trillion.
If you need to hold a training seminar, choose a more cost-effective venue that is local to you. If you’re holding a conference, try to have it broadcasted as to save money on airfare.
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Go Green
While “green” may seem like a hollow buzzword in the business world, green business practices can often help slash your overhead.
Maintaining a paperless office means not having to invest in expensive printers, copy machines, toner and paper.
Energy efficient appliances and light fixtures can lower your utility bills significantly. According to the Department of Energy, appliances with the Energy Star label use 10 to 15 percent less energy.
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Use Social Media Marketing
On average, companies spend 10.4 percent of their expenditures on marketing. This is certainly money that could be saved.
Choose low cost alternatives for your marketing. One great thing about social media is that using accounts on Facebook, Twitter and Instagram to market your products is completely free.
Most businesses will encounter a lot of highs and a lot of lows. Sadly, many companies cannot survive those low points. However, with enough funds in reserve, you can weather the storm.
Make sure you slash expenses so you have enough to put in the bank to maintain an emergency cushion.
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