By Alex Lawson | Budgeting is one of the most significant areas of stress for any company, and the management team often bears the brunt of worry and frustration. Budgeting pitfalls are very common, especially for startups, as the owners are still figuring out the best money management strategies. Improving this situation on a short timeline is never easy, but it can be done, and the below tips can help to improve your budget within just a year.
Bring in a CI specialist
It sounds counterintuitive to hire someone to save money, but CI (Continuous Improvement) specialists have a particular role within your organization. Their task is to look at ways your company can improve, whether that means selling more, spending less, or just being more efficient.
They don’t just stop there. Once they have made the changes needed to get your budget on track, they’ll continue to reassess and look for ways to make things better in the long run, potentially continually saving you money in the process.
Waste is one of the biggest issues for any business, and it can often be avoided. First of all, look at your processes: where is the most wastage happening? Can you reduce it in any way so that you don’t have to spend as much?
Secondly, think about ways you can use your waste. For example, you might be able to update your software to make the work of the employees faster and more efficient. It is also a good idea to invest in technological advancements which will reduce the number of unnecessary steps in your processes. If you decide on updating your equipment, you could sell your old computers, printers or conference phones to other companies, thus making a profit.
Cut the driftwood
There might be some employees in your company who are little more than driftwood. They floated in, they don’t have much purpose, and they seem to lie around getting in the way. If your team isn’t functioning at full efficiency, then make some changes.
Identify the weak links by improving your performance tracking tools and introduce regular productivity check-ups to assess the work of high and low performers. You might be able to bring in some new employees who will work harder and make more money, or you might be able to reduce the size of your team altogether.
Spend less money
It sounds obvious, but there might be ways in which you can spend less money by being smarter about the way you work. For example, instead of hiring social media specialists, you can train and encourage your current staff to use advanced social media management tools that would have a similar outcome, but for a fraction of a price.
Think about other areas of your business in which you can cut your spend, too; it can be anything from renegotiating your deals with vendors and suppliers to effective use of cloud computing to going green and paperless.
Remove the bonuses
Traditionally in many companies, board members, directors, and the executive management team will receive a hefty bonus at the end of the year. But if your company is not functioning well enough and you’re trying to cut the budget, it doesn’t make sense to reward everyone.
Who’s to blame for the poor performance or the lack of results? When you can identify them, you can remove or reduce their bonuses. Not only does this save money, but it also sends a message that rewards are only for those who get results. Next year, expect to see an upswing in productivity.
There are lots of little ways to make cuts to your budget, and they all add up over time. When you need to make it happen by the end of the year, however, more drastic action is required. Using these tips will all help to improve your budget, and using all of them at once will make a huge difference.
About the Author
Alex Lawson is a Financial Team Leader and a blogger, working together with other experts at Brighter Finance. Whenever not working on another project or helping customers with their financial issues, Alex may usually be found online, reading money-related blogs and sharing his tips with other experts.