Many business owners say controlling company expenses is overwhelming. According to a nationwide survey of small and midsize businesses conducted by SunTrust, 70 percent of business owners feel somewhat prepared or less to control their expenses. But separating monetary goals into those for either the short term (think six months) or long term (a year or more) can help you find savings—and reduce stress.
Here are three actions you can take in the next six months and three to practice in the long run to rein in expenses:
In the Short Term
1. Update your payment terms: Customer payments shouldn’t stifle your cash flow budget, they should fuel it. Only a quarter of small and midsize businesses surveyed by SunTrust updated their payment terms to match their cash cycle in 2014, but among those that did, 36 percent of small businesses and 56 percent of midsize businesses successfully controlled expenses.
2. Pass on paper: Paper and ink cost money, as do the storage cabinets that hold them. By going paperless, you can save on both printing and storage expenses. Scan important documents to keep track of them electronically, and utilize cloud-based services to share work virtually and automatically sync files.
3. Cut travel: Take a good, hard look at your upcoming business travel and decide if it’s all necessary. Forty-six percent of small businesses and 43 percent of midsize businesses successfully cut back on travel or traded in-person meetings for teleconferences to trim costs in 2014, according to the SunTrust survey.
Over the Long Haul
1. Invest in a tech upgrade: While upgrading your business’ technology may require a big investment upfront, the increase in productivity can pay major dividends over time. According to the SunTrust survey, both small and midsize businesses said they would be more likely to invest in new technology or equipment to control expenses in the future than take any other measure.
2. Freelance your work: Using independent contractors or freelancers can be cheaper than paying full-time salaries and benefits. Consider using temporary workers for short-term projects, and if you require long-term assistance later, you always have the option of hiring them full time.
3. Renegotiate contracts: Talk to your suppliers about setting new contract terms with lower prices. According to the SunTrust survey, 37 percent of small businesses and 32 percent of their midsize counterparts used this tactic to control expenses. If you’ve had a long-time relationship with a particular supplier, it may be more open to the idea to avoid losing a valued customer. But don’t stop there. Brainstorm other contract terms you could renegotiate, such as your business credit card’s annual percentage rate.
Managing business expenses doesn’t have to be intimidating, and by separating your monetary goals into the short term and the long term, you’ll be on your way to realizing true savings.