Just because we plan adequately for relevant business expenses doesn't mean we need to use that money indiscriminately. Preparation and forethought can go a long way in stretching an expense budget, so let's examine a few strategies for spending thoughtfully even if there isn't an urgent need to cut costs.
1. Talk to vendors about bulk discounts.
Hopefully, you have a stable of reliable suppliers that provide your business with quality products and services. If you've been a good customer that routinely generates a lot of revenue, these companies probably want to keep you.
Ask your partners if you can lock in lower prices by guaranteeing and/or pre-paying for your expenses, or see if they can offer a discount on larger quantities or deals. Not only can this strategy help keep your expense budget in check, but it may also assist your team with overall budget forecasting for the weeks, months, and even years to come.
2. Employ a local barter system.
Many business owners take pride in being active parts of their communities. If you've met other owners through your Chamber of Commerce or simply because you are a local customer, brainstorm potential ways to trade products or services.
Ask your existing technology vendors if they have helpful upgrades or extensions that they can offer gratis in exchange for contract renewal.
I once successfully bartered future of work consulting for office space, and a few years later traded an event keynote for a five-year subscription of accounting software. In both cases, a few hours of my time reduced my expense budget considerably and bolstered neighborly relations at the same time.
3. Revamp your expense policy.
Once you've set an expense budget, you may not question it. This is a mistake. Just because you've always ordered expensive carry-out when customers come in for meetings doesn't mean you should continue to do so. Alternatively, now that you've invested in the most current videoconferencing technology, your employees may not need to fly as often.
Just as today's business world is constantly evolving, your expense budget should fluctuate in a way that supports your business' growth. Continually revisit whether you want or need certain items, and nix those that no longer make sense.
Also make sure that you're communicating expense policy changes to your employees. By explaining your rationale, and providing ample notice, you can transition with minimal difficulty.
4. Choose business credit cards with built-in rewards.
Look into business credit cards that provide points or discounts on common company-related expenses like plane tickets, car rentals, restaurants and office supplies. Sometimes the more you spend on the card, the less expensive future purchases of these items can be.
By consolidating all of my business travel expenses on a card that offered strong return benefits, I was able to fund an upcoming conference trip—which would have taken a major bite out of my expense budget—by 100 percent.
5. Aim for technology interoperability.
Much of every business owner's expense budget encompasses technology—including software that's designed to facilitate automation and make operations smoother.
When technology is new and shiny and vendors are adept at selling its benefits, it's tempting to jump right in and invest. However, if new software doesn't efficiently integrate with what you already have in place, it could easily end up costing more money than it saves.
A better solution? Ask your existing technology vendors if they have helpful upgrades or extensions that they can offer gratis in exchange for contract renewal.
5. Plan for emergencies in advance.
It may sound counterintuitive, but if you've owned a business for a while, you've probably seen the same crises arise time and again. Unfortunately, crises often cost money because they require last-minute actions and materials from others—a big one could blow your expense budget and sacrifice your profitability for the whole year.
Take stock of the recent emergencies that have resulted in big spending, and work with your management team to procure and stockpile extra resources and protect against a mini apocalypse.
Business expenses are a given. While you don't need to go crazy ensuring you always get the best deal, making a few tweaks to your overall strategy and putting your expenses to work for you is a wise approach that can help even the healthiest businesses stay that way.
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