By Nick Friedman, an EO Central Florida member, and president of College Hunks Hauling Junk
Worried about overhead and costs eating your business alive? Don’t be. By learning to make consistently intelligent decisions with your money, you could be increasing your profits by effectively working with what you already have.
A common saying among successful entrepreneurs is, “Revenue is vanity, profit is sanity and cash flow is king!” Cash to a business is like oxygen; without it, you’re dead very quickly. The growth of a business is dependent on a profitable environment from three main factors: increasing new clients, increasing amount billed per client transaction, and increasing frequency of purchases through repeat business.
However, managing the bottom line is equally important—if not more important—than increasing sales. Spending money wisely is critical to enjoying the fruits of your labor. This means increasing your profit margins, allowing more money to be available for you, your team and your business from what you’ve already made.
I’ve found three areas of my business where a reevaluation of spending freed up some capital:
1. Office supplies. Why pay retail prices? Look into bulk service and product providers like BJ’s, Sam’s Club and Costco for everything from writing utensils and printer ink to electronic devices. Start by compiling your most recent receipts from office purchases and note what you paid per item. Look up competitive prices online from other vendors, calculate their discounted prices and compare them to your total expenditures to see your possible savings. The more diligent you become with this process, the more you will save regularly.