Business expenses seem to be very good at running away on us! Our expenses can look like the image in today’s blog. Some expenses are are bit closer to us because they perhaps are overdue, or that particular type of expense always keeps occurring (though it may not be providing any return for the business). While other expenses we can see off in the distance somewhere.
Business expenses seem to be very good at running away on us! Our expenses can look like the image in today’s blog. Some expenses are are bit closer to us because they perhaps are overdue, or that particular type of expense always keeps occurring (though it may not be providing any return for the business). While other expenses we can see off in the distance somewhere – and we hope perhaps they are just ticking over via an automatic payment or direct debit and they are just taking care of themselves! Well as we all know that is not the best technique for winning a running race, not knowing the direction or speed in which we are to go or in fact what the purpose of the finish line is, is a sure fire recipe for loosing.
As a business owner there are multiple expenses from leasing an office, paying staff, marketing costs and so on. It is important that you track and measure your expenses: what is the purpose of the expense, how often is it paid, is there a better price/payment structure that can be negotiated (for example, for paper for the photocopier, or having staff as part time rather than full time), what return is gained from this expense?
For example, do you spend $5000 a year of advertising in print media such as newspapers and industry relevant magazines: has this brought your business in new clients, how many and what type and dollar value of products and services did they buy? Would you get a better return on this expense for your business by investing in $3000 of digital advertising instead, such as facebook ads where your target market audience can be niched down even further. Remember when it comes to marketing, the ‘scattergun’ approach does not work, that is marketing all over the place with no clear offering of the way you are going to solve your ideal client’s problems.
If you use an accounting system such as XERO (Xero is our hero, the BBS Team adore this software, as it really helps businesses to simply and easily do lots of tracking and measuring), or similar, you are able to track your expenses on a regular basis and measure the impact or return they have brought to the business. You are likely to find all those small expenses that can seem like specks off in the distance can cumulatively add to a larger amount but not necessarily be the best use of your money in the business.
Expenses such as a monthly newsletter (via Mailchimp which starts at $10US a a month), subscription to an images site for your content marketing (but then there are some great free options like www.pixabay.com), Dropbox to store your files (starts at $10US a month), Zoho (a database for storing all your customer/client details, that starts att $15US a month) and so on. All these monthly amounts can add up (and then you have to be especially careful to consider the conversation to $AU makes the expense higher).
In summary, make not only the tracking and measuring of your SALES an important aspect of your monthly or bi-monthly review, but also track and measure your EXPENSES. Your expenses need to be ‘run’ in a way that brings return to your business and not just constantly causing a big leak in your bank account or Profit and Statement. The team at Bay Business Solutions can assist you to track and measure your expenses, please email or phone the office if we can assist you.