Financial independence is one of the main reasons entrepreneurs go into business for themselves, but running a profitable company isn’t easy.
- There are a lot of unknowns (i.e., risks).
- You have to manage many moving parts.
- Competitors are always at your heels.
Worst of all, expenses never seem to end.
But in honor of National Financial Awareness Day (August 14), we wanted to outline some simple tips that can move you closer to financial responsibility.
These suggestions won’t turn you into a millionaire overnight, but collectively they can help make your business more profitable and competitive.
We’ll start with some examples of unnecessary expenses, followed by some less obvious ways to save money.
Financial Responsibility: The Low-Hanging Fruit
If you’re looking to cut costs, the most obvious starting point is with your monthly statements to see what expenses you can eliminate.
Some of the lowest-hanging fruit includes:
- Get rid of any subscriptions, tools and ongoing services that don’t provide immediate, profitable value. Note that some of these expenses may be on annual billing cycles, so you’ll need to dig deep.
- Negotiate better rates with all vendors, suppliers and service providers. This includes your credit card processor. The worst that any of them can say is “no”.
- Embrace the sharing economy. You’d be amazed at how many things you can “rent” instead of buy — from office space to computer hardware to furniture. You can even use this approach when recruiting talent (i.e., contractors and freelancers).
- Make your operations more energy-efficient. This isn’t simply good for the environment, it’s also good for the pocketbook. Consider installing LED bulbs, smart thermostats or solar panels. Doing so involves upfront costs, but these are all investments that pay for themselves many times over.
Financial Responsibility: Removing 5 "Hidden" Costs
The tips above are easy to implement. You can see where your money is going since these expenses are printed and itemized for you.
But, there are many hidden costs associated with running a business. These expenses usually aren’t printed, which is why so many entrepreneurs overlook them. However, they can quickly add up.
If you’d like to eliminate these unnecessary costs, follow the tips below.
1. No more checks
Most business owners love receiving checks in the mail. Each one signals another successful sale. Processing these checks, however, can get expensive. In fact, the average business spends between $4 and $20 per check after factoring in delays, materials and processing times.
2. No more paper
Managing paper records is also expensive. Think about the time it takes to retrieve the physical version of the Johnson file vs. the electronic one.
The former requires visiting the correct file cabinet and manually searching for the document in question. The latter can be completed with a few simple clicks.
Then there’s the money you spend on printers, fax machines, copiers and toners — all of which have to be purchased, maintained, repaired or replaced.
Going paperless is both environmentally and financially responsible.
3. No more manual entry
If you’re still balancing your accounting books or updating your CMS records by hand, you’re wasting time. If your employees are responsible for these tasks, you’re also wasting money.
Fortunately, payment integration can automate all of these processes for you. As new sales are generated, those transactions are instantly reflected in the business tools you’re already using. No more manual entry required.
4. No more chargebacks
A chargeback is like a refund — except it’s the customer who initiates the sale reversal.
You lose the sale either way, but with chargebacks you also lose hours disputing the reversal with banks and credit card processors. If you rack up enough chargebacks, you might also have to pay certain penalties or receive higher credit card processing rates.
No matter how you spin it, chargebacks are expensive. This article outlines simple tips you can use to reduce their frequency and severity.
5. No more payment fraud
Credit card fraud is even more expensive than chargebacks. You lose the sale and hours of valuable time, but payment fraud also potentially exposes you to:
- Penalties and fees
- Costly litigation
- Lost consumer confidence
Thus, letting fraud go unchallenged is fiscally irresponsible.
Fortunately, the fix is easy. Choose a payment processor that specializes in PCI-compliant data security. Even better, select a provider that offers:
Making Every Day National Financial Awareness Day
National Financial Awareness Day comes only once a year, but with the tips above you can celebrate financial responsibility every day.
If you’d like more suggestions, let us know. Our merchant services team can help you eliminate unnecessary expenses and improve your bottom line.