Spending money well is the cornerstone of success for any business.
Setting your annual budget, therefore, is the perfect opportunity to review processes and policies and make sure your financial resources are being used where they are needed most.
We take a look at four key areas your business should consider when budgeting for 2019.
1. Factoring in Brexit
While most of us have had enough by now, the Brexit deadline is looming and due to hit us at the end of March. If your business hasn’t put money and planning time into coping with any changes, it’s imperative to now do so.
Of course, it’s not easy. No one is quite sure what is going to be happening in the next few months. Contingency planning is difficult for many business but ensuring there is enough budget put aside to cope with sudden changes is imperative. List the main concerns your business is likely to have and ensure you can cope financially. That could mean, for instance, preparing for currency fluctuations, managing supply chains, or ensuring you are able to deliver to your target market.
2. Review Your Services
Most businesses depend on a range of service deliveries. This can include everything from utilities and phone lines to third-party suppliers.
Shopping around for a better deal on your phone lines, for example, can make a big difference. This is one area that many businesses don’t pay enough serious attention to in order to cut costs. It’s a surprise when you consider communication is a huge part of most business operations.
This can be a complex area to get right, however. Which phone line best suits your business? A Key System Unit? Voice Over Internet Protocol? Or maybe a Private Branch Exchange? Shopping around isn’t easy. That’s why it can be beneficial to use a comparison site if you are looking for the cheapest business phone lines.
With the options available nowadays, whatever size your business, getting value for money will have a significant impact on your overall budget.
3. Setting Your Marketing Spend
For most SMEs, how much to spend on marketing their business is a make or break decision process. Too little and you can find yourself struggling to outperform competitors and stand out in the market. Too much and you end up wasting resources and targeting too many channels that don’t deliver a decent ROI.
If you are a new company, you may well devote more of your budget to marketing because you need to establish your brand. If you are an established business, your marketing activity might well be easier to manage because of experience.
4. Employing vs Outsourcing
For the last few years, many businesses have needed to make the decision between employing people in-house and outsourcing. This can have a huge impact on operating budgets, particularly for SMEs. The benefit of outsourcing is that you tailor delivery to suit your business – you don’t need to find an annual salary, handle employment issues such as National Insurance, tax and pensions, or worry about people taking time off due to illness because you have an employee on board.
There are certain posts in your business, of course, that will require someone full-time and in-house. Getting the balance right will depend on your resources and even your own personal outlook. If your business is looking to save money, however, outsourcing is a vitally important area to focus on and budget well for.
