Here’s a Budget to Use if You Hate Tracking Expenses

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StrategyDriven Managing Your Finances Article |Budget Strategy|Here's a Budget to Use if You Hate Tracking ExpensesIf you’re looking for a budget strategy that suits your own personal approach to finance management, then you’ve probably considered plenty of options. After all, there are a handful of different methods out there, from the envelope budget, to the strategy that involves placing everything you can onto an automated payment process.

Probably the easiest option of all for people who hate tracking expenses is the 50/30/20 budget. This is a budgeting plan that recommends that you should be spending 50% of your income on the things you need (mortgage and food for instance), and 30% on the discretionary items that you want. The remaining 20% goes into your savings and helps you to tackle your debt.

So, how does this budget work, and is there a better option?

The Rules of the 50/30/20 Budget

The 50/30/20 budget is designed to help you manage and understand your money a little better. It requires you to look at your incoming and outgoing expenses and decide where you need to assign your cash to wants and needs. To use the 50/30/30 budget effectively, you need to understand the difference between necessary items like paying off your loans, and unnecessary or “discretionary” items like Netflix subscriptions.

Some people have a lot of trouble figuring out the difference between what they want and what they need. For instance, you know you need food, but you only want a specific brand and extra treats from the bakery aisle. Additionally, it’s worth noting that not everyone can handle the process of constantly classifying their needs and wants or tracking their spending.

If you’re not the kind of person who likes to watch every penny, then you’re going to struggle adhere to the 50/30/20 budget – that presents a bit of a problem.

The 80/20 Budget Alternative Approach

If you hate tracking your spending, you’re still going to need to make some changes to your expense strategy. For instance, you can’t just choose the first personal loan option you see because you can’t be bothered to compare your options for a better deal. Ultimately, good money management requires an active approach to spending. However, you don’t necessarily need to spend every day watching the pennies either.

The 80/20 budget asks you to place 20% of your money towards your savings, while the other 80% goes on everything else – that includes both your wants and your needs. The beauty if this strategy is that you don’t need to track your spending as often. You can simply take 20% of your income away from your monthly money and place it into a separate savings account. Then, you know the rest of your cash is left to spend on your must-have and discretionary items.

Of course, it’s still a good idea to track your spending from time to time if you want to look for ways that you can cut down on your regular monthly costs. However, the 80/20 budget will give you more room to spend money freely.

How to Use the 80/20 Budget

With the 80/20 budget, the best thing you can do is set up an automatic deposit that moves money from your standard current account into your savings account as soon as it comes to you each month. That way, you won’t accidentally spend it. Once your cash has been distributed into the savings account, your checking account money is yours to spend; however you need to use it.

Ideally, you’ll want to check on your spending strategy once every couple of months to see whether there are any trigger areas where you might need to cut back on your spending. This is particularly useful if you find that you don’t have enough cash left over after bills to spend on the things that you want, or if you want to put 25% of your income in savings instead of 20%.

You’ll also need to make sure that the money you’re going to spend on your bills goes out of your account before you start using money for discretionary spending. The last thing you want is to assume that you’ve got around $500 when you actually have $200 waiting to be taken out for your insurance bills.

Once you see how much money you have left after you’ve subtracted your savings, subtract the cost of your bills too, and whatever is left should be yours to spend. This budget requires some care and attention, but it requires a lot less work than the average 50/30/20 budget.

How to Use Outsourcing to Boost Your Profits

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StrategyDriven Managing Your Finances Article | How to Use Outsourcing to Boost Your Profits | Entrepreneurship | OutsourcingOutsourcing is a word that’s used a lot in business articles and guides for business owners, but is it really worth considering if you only have a small business or are a sole trader? If you think of outsourcing as something that only medium to large companies need to do, you’re missing out on a powerful way to boost your profits, because the benefits of outsourcing have no relation to the size of your business.

Because of its association with more sizeable businesses, outsourcing tends to be viewed as a situation where a whole section of a large corporation or organization is subcontracted to another company. For example, a hospital that pays a specialist cleaning company to undertake all the housekeeping duties.

There could be fifty or a hundred employees taking care of the hospital with not one of them being employed directly; the hospital pays the cleaning company, and the cleaning company deals with staff management. The hospital director gets a clean hospital without having to worry about looking after staff, equipment, recruitment, rotas, and all the other responsibilities of doing the cleaning in-house.

The test of whether outsourcing can work for you is to examine the numbers, which will tell you if outsourcing is viable in your circumstance or not. You may be a small business with a handful of employees or someone who works alone out of their back bedroom, but the same financial calculations are as applicable to you as they are to the hospital director. The bottom line is, can you earn more in the time it takes you to perform a task than it would cost you to pay someone else to do it? That’s the essence of how outsourcing boosts your profits in a nutshell.

In practice, what it means is that if your profit is $35 per hour as a freelance researcher, and it costs $20 an hour to employ an assistant to do all your admin, every hour you spend doing admin is costing you $15. If you spent those hours doing more paid work, you could have all your admin done for you and still be making money. In some cases doing tasks yourself could well be costing even more if you don’t have the skills to complete the task effectively and efficiently.

For instance, if you do all your own SEO, that could be taking you five hours each week, so straight away you’ve got the difference between how much you’re losing by not earning, and the cost of outsourcing the task. However you’ve also got the loss you’re incurring by spending more time than an expert would, and not being as effective as an expert at optimizing your business presence. By outsourcing to a specialist like Orlando SEO, you can devote more time to earning, and have a better return on the investment than you’d get if you carried on trying to do your SEO yourself.

Have a look at what you’re doing that could be done by someone else, and see how much it would cost to outsource those tasks. Even if you just take on a remote assistant to do two hours a week, if you make $35 an hour and pay them $15 an hour, over a year you’ll boost your profits by over $2,000 a year!

Unusual Ways to Save Money In Your Business

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StrategyDriven Managing Your Finances Article |Cost Savings|Unusual Ways to Save Money In Your Business If you are in a competitive marketplace and you rely on natural resources or raw materials, chances are that you will need to look for innovative ways to reduce your costs and maintain your profitability. There are several ways you can do that, and looking at your expenditure should always be the first stop. Below you will find a few areas to focus on if you would like to save money and improve your cash flow.

Marketing

When it comes to internet marketing, it is important that you look at the return on investment. There are no cookie-cutter options when it comes to getting the word out about your business. The methods you choose will depend on your company size, your target market, and your industry. Digital marketing and social media sales funnels allow you to measure every stage of customer interaction and promotion, so you know exactly what you need to adjust. Paper and radio advertising offers fewer tracking options.

Resource Allocation

If you want your business to function better, it is important that you allocate the resources accordingly. You should have a just-in-time supply chain system, and a system that allows you to get the right people in the right jobs. You don’t want to pay more in overtime than necessary, and this means that you will have to either offer flexible contracts or have temporary workers in addition to your permanent staff.

Sourcing

When it comes to sourcing your materials, you will need to have a system that looks at the different offers, compares them based on price, benefits, and flexibility. No matter if you are looking for a better quality machine for your manufacturing plant, or a way to measure thin film stress and strain, you will have to consider all the options before you tie yourself into a long term contract.

Unusual Ways to Save Money In Your Business | cost savingsPackaging

Today, most companies are under pressure to reduce the packaging and their environmental footprint. If you pay attention to the packaging you use, and switch to organic or biodegradable materials, you can be one step ahead of the competition and improve your profits as well as your reputation. Of course, if you are working with hazardous materials, you might have limited choices when it comes to packaging, but it is possible to find the right way to reduce the amount of packaging, such as using larger quantities.

Delivery

Your delivery costs are never fixed. You should have a look at the cost of running your fleet, and compare it with outsourcing the process. You might also look at the geographic area you serve, and find out whether or not you are losing money on deliveries. Find a way to measure cost and output, as well as your delivery staff’s productivity, so you can make the right decision.
There are several ways you can cut your regular expenses and operational costs. You have to find a permanent solution that will improve your cash flow and guarantee a certain level of profits.

Dodge The Issues That Cause A Young Company To Crash

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StrategyDriven Managing Your Finances Article |Business Success|Dodge The Issues That Cause A Young Company To CrashDid you know that over ninety percent of businesses fail in their first year on the market? This shows you how risky setting up a company can be. It’s very much a lottery whether your company is a success and survives for the long term or even beyond the first couple of years. Why is this? Well, first, there’s the competition. Thousands of new businesses open each year and it makes sense that customers are not going to buy from them all. Instead, they are going to pick the ones that are providing the most appealing options or the best price. In some cases, it’s possible that the winner won’t have either of these factors on their side but will still come out on top. We’ll discuss why that might happen a little further down.

The good news is that once you open your business on the market, you can avoid most of the issues that cause it to fail. This can be related to financial decisions, marketing and promotion or the routes you take to build up your brand. Let’s get started and we’ll begin by exploring visibility.

Poor Visibility

If your business fails, then it could be because you have a poor level of visibility. Visibility is all about how easy it is for customers and potential customers to find your business online. This will depend on your marketing efforts and how successful your campaign has been. Some businesses have no trouble getting to page one of the SERPs for their targeted keywords. Others will struggle to get to page ten and most consumers won’t even get up to page two. The bottom line here is that if you don’t make the right choices with your promotion and marketing then you will be dead on the water.

Mistakes here can be both minor and complex. For instance, a minor mistake is thinking that marketing is one and done. It isn’t and you should be thinking about incorporating it into your monthly business budget. A more complex mistake is based on the type of campaign that you choose to run. Ultimately, you need to make sure that you are taking steps to run a targeted promotional campaign. Unless your business is already successful, you’re not going to be able to focus on every area of the market. You need to research your target audience, identify where they are online and build your marketing campaign around this. For instance, you don’t need to include every social media network if your target customers don’t use Facebook and Instagram.

Overspending

It is possible that you are overspending in your business. If you end up in the red running your company, then you’re not going to last much longer on the market. You need to make sure that you are keeping your business books healthy. While a business can start with zero profitability and making a loss, this is never going to be a sustainable business model. Instead, you need to think about working to ensure that you are making money with your company. So, how do you avoid overspending?

Well, first, you need to make sure that you are aware of the issue. You can do this by hiring an accountant. An accountant will be able to keep a check on spending in your company and make sure that you are staying in the green. They can also help you keep your business model more efficient by telling you where you can afford to reduce spending as well as where you might need to increase it. A lot of business owners will avoid hiring an accountant in an effort to save money.

It’s certainly true to say that an accountant can be expensive, particularly if you take one on fulltime. However, you can save by outsourcing this solution to another business. That way you can cut the cost and still have an expert on the phone whenever you need their advice.

If you are not going to hire an accountant, then you at least want to make sure that you are using an online digital solution. The software can be used to track your spending, keep a check and manage the books. This is also useful when the tax man comes around.

Running Out Of Money

Of course, it is possible that you are making a profit but you’re also running out of money in your business model. This will usually be the case where the budget isn’t enough to sustain the high levels of demand. The instinct here will be to cut back and make sure that you keep costs down by limiting your business model. However, this will typically be a mistake. If you do this, then what you end up with is a business that is unable to grow and that remains stagnant. Customers will quickly turn away from a company like this because you won’t be able to offer anything new or interesting.

Instead, what you need to do is make sure you are injecting more cash into your business model for expansion. Once you fund the expansion you can use your new levels of profitability to pay the cost. You may be able to attract the interest of an investor to fund your business growth. If you can’t do this, you will need a loan. You can explore things like Ondeck loan reviews to find the right option here and ensure that you are getting a good deal. Be aware of interest rates as well as fees as this will determine whether a loan is the right choice for your company.

We hope this helps you understand some of the reasons why a business may fail on the market. If you take this advice, you can avoid some of the common problems and ensure that you don’t have to worry about your business taking the next hit. Instead, you can rise from strength to strength, growing your company. Remember, to ensure longevity, you need to have a plan for your business in place. Always start with a five-year plan and then build from there.

7 Ways To Save Money On Equipment For Your Business

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StrategyDriven Managing Your Finances Article | 7 Ways To Save Money On Equipment For Your Business | business equipment | entrepreneurshipLots of companies can end up overspending on equipment. Whether you’re buying office furniture or industrial machinery, here are seven tips to keep the costs down.

Shop second hand

Used equipment is always cheaper than brand new equipment. You do however need to be wary of the condition. Older equipment that has been well used may be more likely to break. For this reason, you should always inspect such equipment in person before buying.

If you’re buying used equipment online, make sure that a description of the condition and photos are provided. It could also be worth buying from a reputable seller – read reviews to see what other customers have to say.

When it comes to general equipment, it could be worth looking out for company closures in your area. Many companies will be selling equipment for cheap simply to get rid of it – some of it may be in very good condition.

Look out for sales and coupons

Dealers of both new and used commercial equipment may have sales throughout the year. A popular time to hold a sale is in January, whilst the Black Friday weekend is another popular sales period. Also look out for off season sales on seasonal equipment – commercial mowers may be cheaper to buy in winter when there’s less demand for gardening equipment. You can also check some great suggestions here for a professional mower.

You may also be able to grab discounts by using coupons. These can be found on coupon sites or by signing up to commercial equipment retailer mailing lists.

Avoid splurging on gimmicks

It’s important that any equipment you buy is appropriate for your needs. Try to avoid splashing out on equipment that’s more complex than necessary. If you’re only looking to do some basic printing, you don’t need a heavy-duty industrial printer capable of printing 60 sheets of paper per minute – a basic commercial printer will do the job and will save you money. Only high end niche businesses are likely to need the most complex equipment available – if you’re starting a printing company, a heavy duty printer might be more suitable.

Hire single use equipment

A popular mistake made by many companies is buying equipment that will only ever get used once or twice. By hiring this equipment, you could save a lot of money.

Hiring equipment can also be sensible if you don’t have the storage space for such as equipment. For instance, a construction company may hire a crane rather than buying one. This could save money having to create extra warehouse space.

By shopping around, you can find the best equipment hire prices. Make sure that the company has a good online reputation so that you know you’re hiring good quality equipment. A good company will keep all equipment well maintained – although you may still be liable for any damage you cause.

Consider energy efficiency

Energy-efficiency is an important factor to consider when it comes to buying machinery. A machine that consumes a lot of energy will cost you more in energy bills. Older equipment is likely to be less energy efficient than modern equipment, which is something to consider when buying used equipment. You may be able to find information on the energy efficiency online, as is the case with these energy efficient desktop computers.

Know when to repair, when to replace

You can also save costs by knowing when to repair and when to replace equipment.

Choosing to repair equipment could save you money in many instances. You can find all kinds of niche parts online from a wafer ring/frame to a new monitor screen – if you feel up to the challenge, you could do your own repairs. Alternatively, you could hire a repair technician to do repairs for you – this may still be cheaper than replacing with certain equipment.

You may want to consider replacing equipment if it is old or has broken numerous times in the past. It’s possible you may be able to sell old broken machinery for parts – this could help give you some money to put towards a replacement.

Warranties or contents insurance may be able to cover the cost of repairing or replacing machinery in some cases. This is worth looking into before you make any decisions.

Maintain your equipment

You may be able to stop equipment breaking in the first place by keeping it well maintained. Certain maintenance may be able to be carried out by your employees, whilst more complex equipment may need to regularly serviced by a professional technician (such as construction vehicles or medical machinery).

Cleaning is often one of the most important maintenance tasks – this is not just a matter of health and safety but also a way of keeping machinery working properly. Dust build-ups can affect many types of machinery and are a common cause of computers failing. If there’s a lot of dust in the air, you may be able to install an extractor fan or use an air purifier to keep it clean.

You should also be careful of environmental factors like cold and humidity. Certain machinery may break if it is stored somewhere that is too hot or too cold. Agricultural machinery for instance may need to be kept indoors when not in use and covered up to prevent damage from rust.