Paying Off Monthly Dues When You Don't Have Profits Yet
Running any sort of business is a matter of balancing your cash flow, ensuring that your expenses are less than your income. For those starting up, this balance can be even more precarious with equal amounts of money incoming and outgoing. This means your company will effectively be making zero profits while still being able to stay operational. Persevering through this time is essential in case things improve later on. As you are walking a fine financial line, however, you will have to juggle your expenses with care, utilising a few simple techniques.
The first step will be to sit down and go over the numbers, ensuring you take all of the incoming and outgoing cash flow into account. Forming an accurate budget is essential for later steps when you manage your finances in the right manner. Here, you should create a budgeting plan that presents an overview of the company. This will show you what you should do to streamline your finances in the future so you can hopefully boost your profits as well. When jotting down the numbers, don’t forget to include the following:
- Operating expenses (manufacturing, packaging, shipping, etc.)
- Overhead expenses (rent, utilities, internet, insurance, etc.)
- Labour costs (salaries, payroll taxes, benefits, insurance, etc.)
- Legal bills (taxes, permits, licenses, registration, etc.)
You will also have to include the amount of money coming into your company. Seeing as you aren’t making a profit, this should equal the total costs when adding up everything listed above.
Now that you know about the numbers, you will have to work out ways to cover the bills so you’re not living on the edge. Outsourcing is one of the easiest ways to do this as you can still get offer a full portfolio of services without having to hire a fulltime team of staff. This can drastically reduce your expenses while still improving your output.
These outsourcers come in various forms, allowing you to streamline your budget in a number of different ways. For instance, you can pay someone to design your website and manage your CRM platforms on an hourly rather than weekly basis. You can also find a virtual office to let in Belfast that is affordable and central. As you can see, there are numerous options available to you as the profitless business owner. With a little creativity, you can lower your costs through outsourcing so that you can safely cover all expenses in the future.
When it comes to service providers such as landlords, internet firms and content writers, most people tend to see their fees as being fixed. If you have been with them for a while, however, and can show your trustworthiness, they may be a little more flexible with the pricing plans that they offer. This can be a great way to reduce your costs and free up some capital, especially if you:
- Request a lower rate in return for a longer contract
- Ask to temporarily postpone this month’s costs till later
- Negotiate the repayments on any outstanding loans
In certain circumstances, these financial terms may be flexible enough to help you get through this tough commercial patch. You won’t lose out on anything if you try, especially since all types of costs from utility to phone bills can be negotiated. If you are persistent enough, maybe you can lower your expenses and prevent yourself from going over into the red as a result of future changes.
Our last tip is to get out there and talk to different service providers about how they can help lower your overall expenses. By doing some research on everything from web designers to real estate agents, you can get a decent feel for what is available out there and may even spot a better deal on your next office space, internet connection or electricity provider. Take some time out from your day-to-day business operations and try to seek out ways to reduce your cash flow problem.
By following this advice, you can then cover all corporate costs without worrying about your income difficulties. Even if you aren’t making a profit, you can still manage your money and ensure your business comes out on top!