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Tag: expenses

4 ways to cut your day-to-day business expenses

Profit-making is the central goal of every business, though each brand might have certain goals that may involve giving back to the community they belong to or the world at large. Every business owner or management team should understand that the only way to stay in business is to continually profit.

A business’s income must be higher than expenditure or expenses to ensure that it is in profit. This condition can occur in different ways: the company continually increases its income or revenue streams, cuts down on their expenses, particularly their day-to-day expenses, or successfully manages both systems.

To cut down on expenses, you have to be prudent in your decision making and daily operations. You may have to forgo some processes and make some sacrifices no matter your level of commitment to your community. While it is good to contribute to one’s community as a business or brand, in the end, what matters is that you remain in business, and that can only happen when you are not deep in debt.

For this article, we will focus majorly on how you can minimize your running expenses to ensure a profit in your business.

Harness Technological Solutions

As ironic as it sounds considering the cost you will have to incur in setting up technological tools, harnessing technological solutions is one of the standard ways to cut down on expenses. The main cost you will need to use these solutions will be in setting up the tools and little on maintenance, in as much as you have experts that will run them in your workforce. However, these solutions will constantly help you reduce running costs on manual operations.

With technology, you can cut down on your workforce, saving you a lot of expenses that would have been spent on wages and allowances. You only need skilled professionals who can handle and manage the tools to get the job done on a large scale faster than manual labor.

The quality delivered using manual processes is nothing compared to that of technological solutions. It could translate to an increase in income as clients are ready to pay more for a job well done.

Offer Internship Opportunities

Using interns is a win-win situation for the company and the community in which they are located. It allows you to have a business that improves your community’s quality of labor force by training personnel to be professionals and experts in their respective fields.

On the other hand, it is cheaper to have interns do the job as they earn less than experts and experienced workers. It would be best as a business if you considered having a hybrid of interns and an experienced workforce. If this is balanced properly, maximum efficiency will be recorded at a low cost.

Accommodate Working Remotely

Moving a considerable percentage of your workers to a remote working model will help you cut down expenses in running the office daily. You may have to keep some essential workers at the office if you think closing down totally on office operations will hurt your business.

To maximize productivity, you must have systems in place that will help you monitor and manage your workers’ activities. These systems will help you ensure no decline in the quantity and quality of work being done, and that your workers do not spend office hours doing personal work.

Outsource Some Departments and Operations

Outsourcing some aspects of your operations to professional companies, especially when you do not have the best hands to handle them as a growing business, will reduce expenses.

Rather than spend money on labor that is not delivering the best services, it is cheaper to outsource to professionals. You can cut down your workforce and daily running expenses that you would have used in maintaining those departments if you would have kept them within your management.

Examples of operations you can outsource include; Human Resource Management, Information and Technology, Customer Service, and Relations. You can use a Professional Employer Organization (PEO), such as Global PEO, or another provider, to handle your recruitment process, tax processing, payroll services, management of employee benefits, workforce training, and many more.

Financially preparing for back-to-school expenses during the pandemic

For many parents, August marks the start of back-to-school planning. While this year is no different, the preparations have changed due to the pandemic as the logistics of children returning to the classroom are more complicated than usual.

While you may not yet know if your children will be learning virtually or in-person, there are still ways to financially prepare for related expenses.

In-person expense planning

With the need to minimize contact and the sharing of supplies, basic school supplies like pencils, folders, crayons, rulers and glue are even more important this year, and so are safety items like masks and hand sanitizer. According to the National Retail Federation, the average American family plans to spend $789.49 on school supplies, which is up nearly $100 compared to last year.

Costs for virtual learning

As our communities continue to reel from the coronavirus, many schools are embracing virtual learning full-time, or creating contingency plans in the event of COVID cases impacting attendance. Hopefully the school district will provide the necessary technology your students’ needs, but in the event they don’t, it is important to be prepared for this added cost. Tablets and laptops can run from $330 – $1,300 depending on the brand you select. You might also want to consider different tools such as timers, planners or apps that can help your student stay focused and manage his or her time.

Creating a designated study space for your student at home could also cost some money. Desks and chairs can get pricey so look for ways to creatively reuse furniture you already have, or scout for deals and sales. If these extra expenses are not part of your monthly budget, start small and buy one thing at a time. Make a list of what your student needs and work it in your monthly costs as you can.

Unforeseen costs

In addition to planning for back-to-school costs—regardless of how schools will operate—it’s also important to refresh your finances related to personal costs related to insurance, at-home medical supplies and cleaning materials. Many students will be due for their annual medical physicals. Check in on your medical benefits to see if the preventative care for your student is covered or which clinics will offer back-to-school physicals.

Depending on your student’s after school activities, you might also need to plan for the costs of new gear and supplies. Be sure to talk with teachers and coaches regularly to know if activities are happening this year and what precautions you need to take to keep your child healthy.

Your grocery bill might also change during this atypical school year. You might need to spend more money on groceries to account for eating most meals and snacks at home. Or you might need to buy additional items for your child to safely eat lunch at school without requiring them to use communal supplies.

No question: the 2020 school year will be a novel experience for children, parents and school staff. Stay financially prepared for whatever is ahead by considering the costs for both in-person and virtual learning and building your budget early.

Wendel Abby Abby Wendel is the president of consumer banking at UMB Bank.