3 Business Budget Areas That Can Quickly Get Out of Control
In some ways, running a business is incredibly simple: you just have to focus on generating a profit.
If you can continually generate a profit, then you’ve got a business— everything else is secondary in the business world. Profit is the be-all and end-all; the decisive factor on whether your business is a success or a failure.
In an effort to ensure you generate the profit you need, you have to keep your costs low— that’s a given. Many business owners focus on keeping their costs low in terms of the core production of their products and/or services, but there are a few areas of your budget that can be surprisingly costly if you take your eye off the ball. For example…
SEO and digital marketing
If there is one thing you have to know about SEO as a business owner, it’s that it takes awhile. If an SEO company claims it will have your business on the first page of Google results in the space of a month, run a mile— they either don’t know what they’re doing, or they’re a fraudulent company.
SEO is a time-consuming process that can take months to prove fruitful. As a result of this, you may be tempted to just keep spending on SEO in the hope that the technique you are using will bring forth results in a few months time. Of course, you do this with no way of knowing that it will prove fruitful; you’re essentially spending money, then crossing your fingers.
This is an expensive way of handling SEO and marketing campaigns, so implement a simple rule: one SEO or marketing strategy per quarter. Use your budget wisely, and give each strategy or campaign time to deliver results before you spend more in this area. This is slower, but ultimately, a better use of your budget.
It’s nice to be able to trust that your employees are truthful when filing their expense claims, but it’s also a simple fact that employees have a tendency to exaggerate in certain areas when filing expenses reports. Try to audit at least one person per month to ensure their claims are based in reality. Often, just informing your staff of random expenses checks is enough to make everyone change how they claim, so it’s worth announcing the audits and seeing if the overall amounts being claimed drop.
Stationery is vital to a business operating smoothly, but it’s also an area where costs can spiral out of control in the blink of an eye. There are a number of reasons for this; staff theft can be a problem, as can a general attitude among all workers that the stationery isn’t that important— after all, to staff members, the stationery cupboard always regenerates and they can always grab another item if they lose the one they had initially.
If you see your stationery costs beginning to escalate, you can issue warnings to staff that stationery item consumption is now being closely monitored. It may also be worth checking with other vendors to ensure you’re getting a good deal when you buy stationery supplies for your office.
By keeping a close eye on the above budget areas, you can be confident that you’ll keep your costs as low as possible— which should mean you see an improvement in your profits as a result.