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Small businesses and new startups are forced to keep their costs low so that they can maximise their margins, reinvest everything possible, and make a name for themselves in their targeted industry. The tricky part is growing whilst remaining sustainable, as there are so many unforeseen costs that can stifle expansion.

Knowing the challenge, Grenke have put together 5 financial hacks for small businesses, helping you to keep costs low and profits high as you chase growth and success.

1. Hire Remote Workers!

Welcome to 2022, there are more freelancers, location independent workers, consultants and coaches than ever before. Thanks to talent platforms, remote work & virtual assistant agencies, Facebook groups, and even your own friendship circle, it’s really easy to find remote workers at a low cost.

Instead of trying to find the budget for an additional salary on the books, hire remote-based freelancers from anywhere in the world to perform the desired tasks. They’re often more affordable, already trained, and work on a task-based payment system. 

For some small businesses, this is a stopgap solution to help growth, but for others, it’s a permanent fix that allows them to ditch the office entirely and focus on growing the business digitally.

2. Stop Delaying, Start Repaying

Review your expenses, start making payments on the loans or credit cards with the highest interest, look for savings opportunities in your regular outgoings, and make sure you’re not going to get charged anywhere unnecessarily. Can you switch some subscriptions and services to free up funds?

Get started right away, don’t let a mountain of paperwork build up. In fact, it can be very helpful to schedule…

3. Regular Money Meetings

Open your calendar on your phone or computer right now and pick a 30-60 minute slot each week to have a money meeting with yourself. You should bring in your accountant or whoever else handles the sums in your small business. As you get better at this, you might want to do 30 minutes a fortnight, or an hour a month. For now, an hour a week, put it in your calendar, literally schedule it now. Never cancel them. If you can’t make it, reschedule it. 

With the help of the accountant (or yourself if you’re qualified to self-account), sit and go through your:

  • Balance sheet – get a continual understanding of your assets and liabilities
  • Income statement – compare your revenues with your expenses and make note of what is going to happen in the coming week (before your next money meeting) – essentially look at invoices sent and received
  • Cash flow statement – where did the income derive from, and where did the spending go to? Look at your bank account, understand your safety net. If you have a bad month, do you have the cash flow to survive?
  • Budget – forecasting what you expect to make and what you expect to spend gives you a good budget to abide by. It won’t always be good news, but the money meeting will help you to strategically prepare for whatever may come

4. Separate Bank Accounts & Expenses

It’s totally normal when you start a small business that you use your personal bank account or credit card to handle business transactions. That’s a very short-term solution. You need separate bank accounts, one for personal, one for business, pronto. 

It’s very easy to open a free and zero-fee business account and it makes your accounting, your taxes, your expenses, and a potential audit so much easier. Having two accounts will allow you to really know what is a personal expense and a business expense, not mixing the two up.

Find a bank that offers compatibility between your payments and your accounting software and you’ll manage to save yourself a lot more time there!

5. Embrace the Circular & Sharing Economies

Small businesses are encouraged to make use of the circular economy and the sharing economy, but, what are they?

Circular economy: sharing, leasing, reusing, repairing, refurbishing and recycling assets for as long as possible to maximise their lifespan. This can be perfect for office furnishings, business vehicles, and responsible handling resources.

Sharing economy: share equipment, talent, premises, vehicles, subscriptions, and more. Various peer-to-peer and sharing networks exist to help make better use of lesser-used assets, to match the supply and demand of shared goods and services, and to enjoy the temporary use of things that are not needed permanently. 

In short, think more sustainably in order to help your business be more sustainable.