Main menu

Pages

How To Run A Small Business on Tight Budget ?

For every entrepreneur starting a business is simple process thing, but running that business with limited budget is crucial thing to manage, most of the new entrepreneurs fail at this point of time, they lose their reputation, credibility because of their lack of experience in understanding the dynamics of the business on various aspects, how to run a small business in tight or little budget is a big problem to many of the new entrepreneurs because they don’t know how the cash flow is coming to their business, how much expense they are spending to run their business.


How To Run A Small Business on Tight Budget ?


You have to be very careful when you are taking the decisions on inventory or expenses, you have to cautious when writing cheques for your business associates, if you learn the basic steps of how to run a small business then you can be able to run your business smoothly without worrying about losing credibility or reputation.


How To Run A Small Business

How To Run A Small Business

Read more: 4 Levels of the Social Intuition for Digital Marketing


Cash Flow

Cash flow is a movement of money into or out of your business, cash flow data gives you how much money average per month coming to your business through sales and how much money is going for expenses or to buy products for inventory management, this cash flow can vary depended upon sales or expense of that particular month so you have to take average for that.


In most of the business’s you don’t get your payment instantly, business partners will take credit period to pay your dues, someone keep their promises and someone don’t, getting an idea of how your business partners paying gives you the cash flow data, if you want to get your payments instantly try to follow these steps.


  • Offer discounts
  • Do minimum margin sales
  • Avoid credit customers
  • Follow up for payment from loyal customers
  • Keep less credit period of time for loyal customers

 

Inventory Management

If your business is a product based, then inventory management is the main factor which can simplify your budget struggles, keeping 30 days stocks at your premises depended upon the sale of the product reduces the capital investment, tracking which product is moving which are not tells you the how much stock you have to keep, sending back the non movable stocks to the seller gives you the peace of mind, continuous monitoring of your inventory is crucial when you are running business with little budget, otherwise those non movable products blocks your capital investment without any profit.


Don’t keep highest inventory of any product until unless you are getting huge profit of margin from that product and it’s sale is high, if you are able to manage the inventory most of your budget problems will be solved, it reduces the unnecessary problems of your credibility and reputation.


Over Estimate Expenses, Under Estimate Revenue

In any businesses every month or year will not be the same, ups and downs are common in nature , you have to be alert about this, every time when you are writing a business plan consider over estimating your expenses and under estimating your revenue, according to your revenue plan your expenses, allocate budget for employees salaries, marketing, office rent and other miscellaneous expenses, try to reduce your expenses by over estimating the expense.


Tracking And Measuring Everything

Tracking and monitoring your business from all aspects reduces the investment and expenses, everyday keep a track on expenses VS budget, Revenue VS Budget, Gross Profit VS Budget, selling effectiveness , inventory effectiveness, receivables and outstanding, employees performance, sales backlogs.


Use technology to track and measure the above steps, take immediate decisions when you find any thing wrong, make employees to know the importance of tracking and measuring in all aspects, generate reports to discuss with your employees, allow your employees to advice on cost effective procedures to run a business.


Create SOP (Standard Operational Procedures)

Running business systematically brings effectiveness in all aspects, you have to feed yourself as well your employees to follow some set of rules ( standard operational procedures )blindly like. 


  • Not more than 30 days inventory
  • Regular follow up on Outstandings
  • Weekly Physical stock check
  • 10 AM to 7 PM office timings
  • Organizing the data
  • Placing orders as per the requirement
  • Adding new clients every month
  • limit on Mobile/travel expenses


If we were able to systemise everything by keeping checks at every point on above discussed points we can smoothly run our business with little budget without losing our credibility and reputation.

Comments

table of contents title