Whether you’re new to business or not, you can probably discern that your sales budget is the absolute core of your operating budget.
If you fall short on sales, you set off a chain reaction that could risk undermining the success of your business. The major issue is that your sales budget isn’t always up to you.
If you sell a seasonal product, you could end up having a fluctuating sales throughout the year. You also have to contend with consumer spending habits, which are statistically higher in some months than they are in others.
Finding the right rhythm for your sales budget is essential to setting a path for the growth of your business.
Creating a budget that you can’t meet will set you up for failure. Follow these 8 tips to get a better handle on how to keep your budget on track.
1. A Sales Budget Means No More Unnecessary Expenses
As money comes in, it must go out for your business to grow. You have to have a sense of spending money in order to make money, but letting this concept get out of control could limit your company’s potential.
One of the top ways that companies go under is through the kind of waste that comes with mismanaged expenses. Unnecessary expenses could be like a slow leak that brings your entire ship underwater.
No matter the size of your business, you should have a simplified version of your budget in your head. Create a simple expense report process that is connected to your accounting or bookkeeping efforts. At least once a month, look for overspending and discrepancies.
Your sales budget could be made to struggle under the weight of your expenses and spending. Make sure you can meet the needs of your business without having to create unreasonable goals for your sales budget.
Listen to the advice that other businesses have to offer about accounting for your small business.
2. Budget Your Time
Your time is as valuable as your sales budget.
The time you spend entering invoices and balancing your budget could instead be spent chasing leads and managing marketing. If you balance your time, you’re balancing your resources, which is all that time and money are for a small business.
If you have a staff, budgeting time means keeping an eye on overtime.
If you’ve got a small staff, you usually have an idea of who is handling each task, and at which time. Make sure every person is being used to their maximum capability during every shift that they work.
Finding the best way to manage everyone’s time could put less pressure on your sales budget to make up for the money that’s going out in payroll. Improving efficiency for you and the people you work with is as important as balancing your spending habits.
3. No Late Fees
Paying your bills on time allows you to avoid paying late fees. Late fees are a completely unnecessary expense for any individual or business. If you’re spending a penny of your sales budget on late fees, you’re throwing money down the drain.
While you may have balanced your budget for paying a certain amount in rent, utilities, and various services each month, you could be paying up to 10% more. For a small business with high overhead, this number could add up quickly, eating into your sales budget in problematic ways.
If you have credit cards for your business, be sure that you’re paying them off promptly each month. If possible, pay off your credit cards entirely at the end of each month.
An increasing number of companies, utilities, and services allow you to schedule automatic payment of your bills every month. This could ensure you don’t pay more than you need to for any of necessities.
Late fees are often the result of bad accounting. Be sure you’re using the best practices in your industry for the best accounting results.
4. Don’t Be Low-Tech But Try Slow-Tech
While the best and newest tech gear might seem useful for your business, you can probably find cheaper options.
Does your company need the latest MacBooks for some specific reason or could you get by with some refurbished PCs?
There are a lot of cheaper technology options for small businesses. For every item you might need, you can find a cheaper option to go easy on your sales budget.
If you’re thinking about buying smartphones for your staff, think about it carefully. You might not need to have bought the most expensive phones. You might be able to get a great deal on some through a tech reseller.
Decide what the bare minimum amount of technology your company needs to survive and try to find a discounted version of every piece of equipment.
If you don’t have the budget for a full-time IT department, know that you’ll face hardware and software issues you might need to spend money on.
Budget for expenditures and repairs in advance so that you’re not blindsided when they come along.
5. Take Employee Feedback
Don’t task your employees with worrying about every penny that your company spends. That’s part of your job. But you should let them know ways they can cut spending.
Have a conversation about where you see waste happening and leave the conversation open for their comment. You might be surprised to find that they see other issues that you’ve missed. Ask for further ideas and implement some of their thoughts.
Reinvest those cut costs into your business through more efficient technology and at times, small additions to benefit employees. Upgrade the coffee machine following a conversation were employees find a way to save a few thousand dollars a year.
If employees get particularly good at cutting costs, reward them with a small raise to show appreciation. That will ensure that their good habits continue for years to come.
6. Become a Better Haggler
Very few prices in the world aren’t up for negotiation. Business owners are notoriously bad at negotiating. They often feel vulnerable and like losing a prospect could be a high stakes affair. The only thing is, often small business owners have more power than they realize.
When speaking with a vendor, you could be asking for a better price.
If you know two other vendors who are offering the same product, your vendor probably knows four. They know who could offer you a better deal and they don’t want to lose your business so they could lower your cost up to 10 percent.
You’ll find that these small negotiations could add up to some serious savings that have a long-term impact on your sales budget. If you’ve never negotiated with a vendor before, do some research and find out some methods for negotiating before you make that call.
7. Clean Up Your Supply Situation
Every piece of equipment and every supply in your office has a cost. From pens to paper towels, your sales budget keeps your cabinets full. Think about everything you use on a daily basis as part of your overall financial investment in your company.
Take some time to find both eco-friendly and economical alternatives to everything. Even switching out your 5-gallon water cooler machine for a filtered water alternative that hooks up to your main supply could be a big saver over time.
Think about keeping all of your supplies in one place so that it’s easier to take inventory.
Task a few people to be in charge of office inventory. Give each employee their own supplies to take care of and things that belong to them. This will create more accountability and lead to everyone taking better care of the supplies in the office.
Responsibility and accountability are the only things in the way of cutting your spending on office supplies.
8. Give Better Rewards
The only thing keeping you from exceeding your sales goals on a consistent basis could be a reward program.
Every month you could rank the top few sellers with something small. Make sure you keep it friendly and it will build morale and a healthy amount of competition.
If you’re spending money on perks already, assess how they’re being used if at all. If your company fitness program is costing you thousands a month and no one is taking advantage of it, you could replace it with a healthy food option. You’ll end up with essentially the same kind of perk but you could save a little money and offer something employees will actually use.
Employee recognition is a way to ensure your sales budget stays steady.
Your Sales Budget Keeps Your Business Running
Every item in your company’s budget is connected to your sales budget. If sales dip down, so do all of your company’s supplies, inventories, and overall morale.
People working at a company know when it’s doing badly and it could end up exacerbating the situation if people feel bad about the company’s health.
Make sure that your bookkeeping and accounting are being done correctly. You could be doing better or worse than you think due to a poorly made rounding error.
If you’re ready to take a new approach to your sales budget, contact us today.