Do This to Stay Afloat When Your Expenses Mount Too High
When you’re strapped for cash, it is important that you make sure that every dollar goes to good use. The last thing you want is for your business to go under because of runway expenses, especially when you are on a tight budget.
Today, we are going to look at important ways businesses can stay afloat when their expenses mount too high. These tips might come in handy when sales have dipped, customers are scarce, and you’re finding it difficult to foot bills.
1. Stay on Top of Discretionary Expenses
The chances are you were planning to paint your office, get a new coffee maker or replace the old photocopier. But, wait: are these expenses really important? Should the next marketing strategy be implemented amidst a financial crisis? If you have mounting discretionary expenses, closing your checkbook is the way to go.
2. Slow Down on New Hires
Full-time workers are a big overhead that can usurp your income. The good thing is that you can hire temps, freelancers, and casual help to take care of temporary tasks so you can hire full-time employees when things are looking up. Recruiting, qualifying, and training new hires can be quite costly and time-consuming.
3. Pick Quality over Quantity when it comes to Customers
Going for quality customers over quantity is a no-brainer advice that can do wonders for your revenue stream. You see, an excellent customer who pays on time and is easy to work with is way better than several bad customers who will hamper your cash flow. If you keep a tab on the time and effort you spend handling shoddy customers, you will quickly come to the conclusion that you are actually losing money. As such, don’t be afraid to cut the slack to stay afloat during tough times.
4. Work on your credit rating
If you own a small business, there is a good chance that lenders look at your personal credit history and credit score to determine whether to give you a loan or not. Even then, banks and lenders often review your business credit when calculating interest rates. Of course, having a business line of credit can help streamline your cash flow.
5. Be Mindful of your Spending
It might sound like a cliche, but it is important to think carefully about your spending. Don’t spend your money without knowing if that dollar will help grow your business. If your dollar-spend is not going to improve your product or attract more customers, it is best not to be doled out. The bottom line is that maintaining a lean spending mindset will help you become more focused on what matters most to your business.
6. Prioritize your business bills and debt
The best way to trim fat and stay afloat is to pay more attention to your recurrent bills and debt. If possible pay off high-interest credit cards and secured loans. After all, if you don’t pay the mortgage and car loans on time, you risk losing your prized assets.
Staying afloat during high-expense times is all about making every dollar count, and keeping your costs low.
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