Running any kind of business is challenging, but operating a small business is a whole other kind of battle. Since your business probably doesn’t have too many employees, you’re likely doing a lot of the work yourself. What’s more, many small businesses start out surviving on small profit margins which often forces business owners to make sacrifices in order to make ends meet. Opting for a small office space, being strategic about inventory, and minimizing production costs are all areas where you might want to save money. But there are other facets of your business where cutting corners and costs would not be wise.
In this post, we’ll be discussing 5 services that are worth budgeting for in 2020, as well as some you might consider doing yourself. Read on to distinguish essential expenses from nonessential ones to help your small business run with more efficiency than ever before.
What to budget for…
As we mentioned, there are certain costs associated with businesses that can be reduced or eliminated, while there are others that are worth allocating some funds toward. Here are some examples of services that you may want to budget for in 2020.
1. Financial services
One of the most stressful components of running your own business is managing finances. From taxes, to budgets and payroll, figuring out how to optimize your finances and keep accurate records might not come so naturally to all business owners. But following proper protocol and staying on track with your budget is essential if you want to run an efficient and profitable business.
Failing to manage your finances effectively can lead to:
- Trouble with the IRS
- Reduced profit margins
- Inventory mistakes
- Payroll issues
(To name a few). Enlisting the help of professional bookkeeping services for small businesses can help you keep your books in order so that your business doesn’t have to face the consequences of being complacent with your finances.
2. Human resources
Not all businesses are required to have an HR department—experts often say that when your business reaches 100 employees, it’s recommended to hire an HR professional. However, you may want to make this move sooner than you think. In today’s workplace, there’s more potential for litigation than ever before, especially when it comes to employment. From wrongful termination to wage issues, discrimination and harassment, there are plenty of potential issues that could arise—credible or otherwise. And with lawsuits come outrageous expenses that you won’t want to budget toward.
Hiring an HR team is an essential step in protecting your business and prioritizing your employees’ needs and happiness.
3. CRM software
Whether you’re running a marketing agency, selling a product, or providing a service like appliance maintenance, you probably need a CRM system to help you keep organized, track leads, and stay in touch with your clients.
Not having an efficient way to keep your customer base organized could cause you to miss out on upsells, new opportunities, and more. Investing in a CRM system to help you stay on top of business can also help you maximize your time since you can store all of your paperwork online and even automate some of your processes.
What NOT TO budget for…
So far, we’ve only talked about things you should budget for, but chances are, there are some places you want to save money, too. After all, you want to maximize your profits, not funnel all of your funds back into your business. Here are a few examples of expenses you can save some money on.
4. Social media marketing
Thanks to the accessibility of social media, marketing your small business is easier than ever. And, for the most part, you can start marketing on your own. Sure, it requires work to create and publish messages, but social media management software can help you make your marketing operations more efficient by allowing you to schedule posts in advance and even monitor their performance.
5. Big office spaces
Another way to save money: don’t spend on office real estate. Depending on the type of business you run, you may be able to run it remotely or without having to spend much time in the office at all. There are a few ways this can save you money: a) minimal rent, b) low-cost utilities, and c) saved commuting costs.
Final notes
Use these tips to evaluate where you should and shouldn’t allocate your business revenue.