Owning a small business is sometimes a very difficult balancing act where you have to wear many different hats to keep the business running like a well oiled machine. The problem with this type of role is the other cost toll it has when running a business.
Most businesses will tell you they spend most of their time on the how much income they make from the producing products or delivering their services that delivered to their customers.
For gyms and martial art clubs this means how many members have gone from a trial to a paying member and looking at the cost of the transition to becoming a customer?
Of course this is very important and you should constantly focus on making your business bigger, but to keep on being successful you need to understand where your money is going. No matter if you are struggling monthly to keep afloat or if you are lucky enough to be comfortable with profits, you still need to take into consideration what you can overspend on and to try and mitigate that as much as possible.
Below we will talk about the most common type of hidden fees that come from running a business which ultimately mean you’re spending increases.
More often than not a small business will be either renting a facility or owning through mortgage a premises. Rent is a huge factor of your main expenses and through being the biggest expense means you must pay due care when deciding where you have your premises, i.e what does your business require today? If you own the space where you are located then we suspect your rent would be your biggest expense.
With the pandemic taking away many customers and your income, the Government this year has helped a fair bit by lowering the costs of rent and offering government grants, make sure you have double checked with them how much you should have got. Delaying this will more than likely mean you are going to miss out on this all important grant.
But what is worth thinking about is how much space is actually being used up, could you rent out parts of your facility? Maybe there is room for another business to sublet a space to use your facility. Subletting is a great way to help support your business.
Marketing and Advertising
Marketing should never be the first expense to go. You cannot expect to gain custom without advertising to grab them, this must be present in any business but look at the avenues and marketing mix you are utilising.
There is a massive difference between spending money on marketing and wasting money on the wrong marketing.
You should track what ways you are gaining new customers, that way you can stop using the marketing that isn’t as successful., data is king in marketing!
For example, are you gaining customers more from social advertisement or posters?
Do you get more customers from text messages and emails or letters?
Remember that texts and emails can be the least expensive way to advertise and gain customers. Within the SimplyCOLLECT system you can easily market to ex customers and or customers on a trial via our contact manager.
Making sure you have spare time to grab new opportunities that could improve your business. Planning your days in your free time making room for research time is vital and can help improve your business. One big complaint from business owners is they don’t factor in how much time tasks take to complete. Your time has so much value so make sure you think about that when planning out any task.
This could be the most expensive cost if missed. Extra fees, the panic and worry. That is why it is best to have fixed dates for payments, then you can arrange to make your payments just after. Ask yourself how many times have you not been paid on time? Could your time have been spent on more productive things in your business? Payment delays cause so much disruption that it can cause many business’s to close. Resolving this can be fairly simple if you communicate the process before payment or services are exchanged. I.e payment will be taken via Direct Debit automatically and or allow the customer to spread the cost with create more convenience them and less likely to not pay.
Where business’s struggle with this is mainly due to the implementation of a process of how can we collect this automatically.
With Simply COLLECT we take away the stress of non or late payments, additionally we electronically take the payments via Direct Debit which means you do not have to rely on your customer to initiate a payment.
Never mix your business spending and personal spending
Sometimes you may find yourself running low on money and you know more money is coming in so you can send it back to yourself, this is a huge error made by many. Mixing payments together then affects you when it comes to tax year, it could end up costing you more money.
Make sure your business account is only used for business spending with receipt of the payments coming in and out.
Negotiate your spending
From buying the premises to buying the equipment, everything you buy is negotiable. You will never know unless you ask, try push for the lowest prices you can. You can save money anywhere.