If you’ve got your mind on your money and your money on your mind, you are probably an entrepreneur. If you are constantly concerned about raising it, keeping it, and making it grow, then you are well on your way in entrepreneurship. Problem is, many entrepreneurs find their great ideas on the top of the scrap heap as they turn out their pockets in financial ruin in just a couple of years. Financial stability for entrepreneurs is a tricky one. The risk/reward has been weighed, but all the MBAs in the world won’t help you if you can’t be a good steward of your company’s cash. How do you insulate yourself from being just another entrepreneur who couldn’t make it happen?
The things you do with your company’s money today will echo into eternity. While it doesn’t feel like much to manage now, eventually it will if you are lucky (and careful). So the disciplines you instill in yourself now as you grow your company will matter a whole lot when there are a lot of zeros in your company’s bank account (the good kind of zeros) and financial decisions have massive implications.
Strive To Increase Profitability Now And Always
Count Your Costs– One thing that successful business people will tell you if that you should never be satisfied that you are profitable enough. What is that anyway? There is always more that can be done to make sure you are spending in the right places and saving for the long term. A lot of that has to do with never being confident in what you are paying for anything is the best price.
Have you figured out what it really costs you to run your business? Are you sure that is the right number? How well you are able to accurately determine exactly what it costs to do business will determine how profitable you are able to become; or whether or not you will grow your business at all.
If you are not sure you know how to accurately determine what it costs for you to do business, you can enlist help to mentor you in this. Take it seriously. It can mean everything. Entrepreneurs who cannot tell investors what it costs them to do business usually find themselves without funding.
Trim The Extra– Once you determine what it costs you to do business currently, you can figure out what you are paying too much money to have. Always having the mindset of finding a lower cost of doing business will keep you hungry to find better prices for the things you need to do business. There are a few culprits in overspending to consider:
- Failing to set up perimeters around business expenses
- Not regularly shopping for lower cost benefits
- Having multiple providers for things instead of bundling services
Business expenses are a profit killer if there are not protocols in place around what you can and cannot spend company money on and having an approval process in place around when it can be spend and by whom. It should go without saying that budgets should be in place. If you need help with budgeting, ask a mentor or an accountant to help you understand budgeting and how to effectively plan your spending.
Are you offering benefits to your employees? Is the price tag killing you? A lot of times, entrepreneurs go with what they think they can for benefits without really considering what they can do to offer more and keep the price tag down. Expensive benefits don’t mean better and cheap usually comes with a lot of lack. Consider a PEO for a better cost savings on benefits, especially if your business is small or in a growth mode currently. Which brings us to the next point…
Sometimes entrepreneurs contract multiple providers to do various things for their business when we can use one service to cover a multitude of things we need for a better cost. Are you paying for benefits, payroll processing, workers compensation and HR Consulting? Did you know a PEO would cover all of that for a much lower cost than what you are paying now?
If you’d like to know more about how a PEO can drive down your cost of doing business and increase your profitability on two of these three points, contact us today and start realizing how profitable your company can be.