Controlling the Costs of a Small Business During an Expansion Phase

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As a business expands, more money is being paid out from the business than is normal. It’s easy for accounting staff to get overwhelmed and lose control of the cash flow forecast to a point where the business gets into a tough financial spot. It’s important to manage the costs with every small business, partly because it’s always a good idea and also because SMEs don’t have access to business funding as easily as large enterprises do.

Here are some suggestions for how to control costs when the company is growing quickly.

Avoid the Need to Move to a Large Office

Rapidly expanding businesses quickly run into difficulties with the increasing number of new staff members and where to situate them. Desk space becomes paramount and not an easy problem to solve without moving to a larger office.

Focus on limiting the space needed per employee. Look at options like some employees working from a home office or working different hours outside of the norm. Two employees can share a desk when one covers the early morning to late afternoon shift and the other works late afternoon to midnight. Minimize physical paperwork to use fewer filing cabinets and storage spaces that cutdown square footage quickly.

Create a Centralized Ordering Role

For companies large enough to support it, assign an employee to take responsibility for all the purchasing in the company. We’re not talking about an accounts payable clerk necessarily either. The employee should be good at looking for the cheapest supplier for frequently used business goods, negotiating with suppliers for better deals, and getting discounts for early payment of the invoice.

The website has helpful tips for business owners looking to keep a lid on their operating expenses.

Be Open to Buying Previously Owned

While companies tend to always buy new, the fact remains that both computers and furniture like desks, chairs and cabinets don’t need to be brand new to still be useful. There are plenty of opportunities to buy remainder stock and bankruptcy stock from companies that pick up old desks and the like at a steep discount from companies that have gone bust.

Outside of using a specialist supplier, consider Craigslist and eBay to find deals on new and previously owneditems that get used in the office. Don’t be afraid to try a new brand if it’ll save some money too.

Find Deals Online During Sales Season

Businesses can participate in Black Friday, Cyber Monday, seasonal holiday sales and other discount periods as a buyer, not only as a seller. Both retail stores and online sites offer significant discounts on computer software, subscriptions, and physical products compared to the rest of the year. Take advantage of sales by slowing down or stopping business purchases when a sales season is approaching, and splurge when the sales are running to get what the business will need for the next few months.

Controlling business costs is something that requires careful vigilance by the people responsible for business spending in the company. When there’s multiple department heads who manage their own spending budget, ensure that they’re not clearing out their budgeted allotment by spending more just to use it up.