Most people today understand the importance of tracking their business expenses at a personal level. However, when it comes to their businesses they often lose track of their expenditure. Tracking expenses is one of the most important aspects of running a business and should never be overlooked. Many people put off tracking their expenses because they feel that it would be adding on to their already full plates.
Regardless of how you want to handle this exercise, below are a few reasons to start tracking your money.
1. Financial awareness
Do you know where your money goes every month? Is your business as healthy as you might think? These are some questions that you might not have answers to if you do not track your expenses. Tracking expenses, even the smallest daily expenses, will warn you of serious spending issues before you blow your budget. By understanding your spending habits you can make necessary changes to better manage money within your business. With this information, you are equipped to make better decisions which save money that could be invested elsewhere.
2. You are better prepared for the tax season
Tracking expenses can come in handy during the least favorite time of the year: tax season. It helps you keep better records which in turn helps the proper filing of business tax returns. The easiest way to reduce the amount of tax you pay is by deducting valid business expenses. How can you do this if you are not aware of the expenses and do not have proof of where the money has gone? It is therefore wise to keep track of business expenses and keep recording them as they occur. By doing so you will not forget them when preparing tax returns.
3. Easy determination of how profitable the business is
Business expenses directly affect how much profit the business makes. When expenses are high profits will definitely be low and vice versa. If you do not keep track of your expenses, you can not be sure what percentage of the revenue goes to paying expenses. Given the fact that business expenses eat directly into the business profits, staying on top of the going out cannot be stressed enough. Many business owners are not able to give the exact figure of their profit simply because they have no idea how much their expenses are. This could lead to over or underestimating the amount of profit the business brings in.
4. Keep stakeholders happy
Your business has many stakeholders including employees, suppliers, creditors, and even the government. Your employees will send receipts for their business travel expenses. Unless you stay on top of your expenses, you will not be in a position to reimburse them on time or in full. This alone can kill employees’ morale which negatively affects your business. By tracking your business expenses you are in a position to come up with a cash flow management plan that can enable you to pay your suppliers and creditors on time, keeping them happy.
With all the benefits of tracking expenses, you can not afford to overlook your cash flow. However, if you do not have the time to track expenses, consider having a smart software handle it for you.
License: Image author owned
License: Image author owned
Guest Post Courtesy of David Brown. David Brown is a geek at heart. He’s worked and consulted on some major online projects over the years. David has a passion for helping people learn the benefits of steam lining their business through computer technology, thereby saving them time and money. His expertise in the computer world has helped companies time and time again, manage their businesses, employees, and clientele more efficiently.
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So you have a small business, and you’re not alone. In recent times more and more people have been drawn into starting their own business. The allure of creating your own unique brand, being your own boss and providing a quality service or product to a loyal fan base is tempting, to say the least.
Niche markets are also growing as consumers and entrepreneurs come to terms with people’s need to support a brand they feel they belong to. Your brand is your biggest asset.
It’s not all sunshine and roses, however. The massive proliferation of small businesses also leads to much more competition, especially when vying for attention. Chances are there are many businesses much like yours, big and small.
Let’s look more in depth at this is. We will also give you some suggestions on platforms and methods you can use as a small business owner to promote your brand.
So why is marketing so crucial?
Spreading the word of your brand
Let’s get the obvious out of the way first. Above all else, if people don’t know about you, they cannot make use of your services or product. It is important to utilize as many different media platforms as you can.
You also want people to know what products and services you offer. Think about it this way. Everyone knows about Coca-Cola. Someone can crave a Cola and go buy it. If they don’t “know” your product in the same way, why would they come to you?
Social media has made it easy to affordably reach consumers at any time, place and through a variety of platforms. Talking to customers individually is also so much easier.
To lift your sales, it’s not only about getting as many people as possible to notice your brand.
If you own a coffee shop and someone is craving a coffee, you should hope they see your coffee first and come knocking! This is also where targeted ads are so important. If you run a steakhouse, advertising on a vegan forum is obviously not a good idea. Target viewers who will turn into customers and watch your sales grow.
Many tools, of which Google AdSense is just one example have made it much more accessible to target the right audience.
Through unique marketing strategies that really express your brand, you can build a loyal customer base that sticks with you when times are tough. Your marketing strategy should include ways you can identify with your target audience on a personal level. Nowadays, people don’t just buy your product, they buy into your brand as well. Loyalty has become a commodity.
A big factor in brand loyalty is customer engagement. Would you stay friends with someone that ignores you, or doesn’t listen to you? Create a platform for people to engage with your business or other customers to create a “community” around your brand.
This is an area where small businesses actually have a one up on their big brothers. As a small business, you most likely have more time to engage individually with your customers. It could be this TLC that makes them come back.
Foster healthy competition
Getting the word out there about your products/services and pricing helps keep competitors honest as well. If people know about the other options out there, it’s much harder for other businesses (even large ones) to create a monopoly. If customers get overcharged, but they know of a cheaper supplier nearby, they can easily switch brands.
Increased brand reputation and prestige
People can sometimes be easy to tempt. If you have a good marketing strategy and good visibility to the public, more and more people will try you at some point or another. Providing a good service or product will not only make these customers return but might turn them into free marketing through word of mouth. Make sure good stories surrounding your business get out.
You can further build a reputation by taking part in the community. Get involved in any community charity projects, maybe even give some product away. The stereotype surrounding big businesses that “don’t care”, gives you the opportunity to show that you do.
How to market on a budget
We have provided some quick suggestions above on how you can effectively market without the need of a huge marketing budget. For a comprehensive list of marketing strategies on a budget, check out this great article.
The most important thing is that you use social media wisely. Look at what your competitors are doing and try to outdo them. Create conversations around your brand, and find ways to make people want to post about you.
We hope this article has proven to you how crucial marketing is for small business owners. Especially at the start of a small business’ life, it’s important to steadily grow your brand.