Are you a small business owner? Are you struggling with time or money? Or a bit both? Is your business on the right track?
So I had a consultation with my client today, who has run her beauty salon for a number of years. She told me she’s been struggling with finance. She has worked her ass off, without taking any holiday, trying to save money over and over but still nothing and so stressed about money! Now she said she’s run off time to pay out anything, credit cards bills are all over the place, plus she has no earnings left to her business!
The questions are HOW? WHY? Why this has happened to her? How did this happen? What has she done to her business in the past few years?
There is no doubt that small business owners should prioritize their budget. A budget plan is an essential part. What you will achieve and how you will achieve it are all down to your plan.
You will need to start your business and you will need money to run it. That’s the basic concept for your business development and maintenance. And also, you would want to keep your finances in check, therefore budget is important! How much time you have or how long you have before you run out of your investment? Can you pay out your bills on time?
After she told me the whole story, I found out she overspent too much, because:
– She only imports beauty products from well-known international brands, which have purely ripped her off! The cost of products plus shipping fees can be extremely expensive.
– She never calculates the profit and loss; there are no journals recorded for her actual income and expenses. She said she forgot to write things down sometimes, and that’s not the way how business owners manage finance!
Here are the tips I have given to her at the consultation:
– Organise supplies, get the best deals possible and try to promote the business. Work out a temporary budget plan, such as how much you can invest at this stage and how much you can spend etc.
Reduce unnecessary overheads, and always overestimate expenses
– She can replace some expensive products with local suppliers or other organic beauty products, rather than using expensive well-known brands. Expensive doesn’t mean it’s better! Sometimes less is more!
– Get deals with suppliers and wholesalers, Christmas sale, end of Financial Year sale etc, sign up with them, get more discounts, reduce your costs, and try to avoid shipping costs or other costs if possible.
– To prepare a budget, you will have to overestimate your expected expenditure. The reason is that you cannot predict when a good or service will increase in price.
– Try to let the technology does the work for you! Tailwind is really popular that helps the majority of business owners scheduling their promotions on social media. Thus less work for you!
Be smart with your accounting
– FreshBooks is common software for small business owners, easy to operate and valuable for the money. You don’t have to generate invoices or record income and expenses on your own, let FreshBooks does all hard work for you! It’s convenience for keeping your money on track!
Create templates and manuals
– Download easy and printable templates, Pinterest normally has lots of awesome and free goodies. This step will save you a big time to generate both formal and informal documentation for your stakeholders. Template for commonly sent emails, promotions and invoices – these will save you having to re-type the same or similar messages.
– Self-delivery rather than hiring a courier.
– Ask families or friends instead of employing someone to help you out for the busy period if possible (temporary solution for her business). Labour cost can be a big expense sometimes.
Define and understand your risks
– Understanding the potential risks facing you on a short- and long-term basis is important for all small businesses. Once you’ve mapped out the potential threats, a clearer picture can be built around your plan, make sure you have insurance to cover you off!
Time is money
– Small businesses usually forget that there is a need to factor in their time when budgeting. Time is money indeed. Some of the workers are paid by hour rate.
Revise your budget plan every month
– Review your budget so as to make the necessary adjustments. The regular budgeting may undergo many changes to adjust to new or fluctuating costs.
I hope she can review the tips and start working them. I told her to give herself a month and see if any improvement. I will be following up and coaching whenever she needs. I don’t encourage business owners to give up! Once you have started a business, there is no way that you should terminate like this! It’s a war, so get up the lazy ass, work out a proper budget plan and wake up manage yourself and the business! You got this and will get through this! There is no problem that could defeat a hope!