How to Better Manage Your Business Costs and Spending
One of the biggest aspects to running a successful business on the internet is being able to manage your incoming and outgoing money. This can be especially hard if you are a sole proprietor or the only person in your company. With so many ad campaigns, web sites, incoming and outgoing payments… how are you supposed to manage it all? This is something I have been doing on my own for over 15 years now and while it’s not the fun side of the business, it definitely needs to be taken care of.
In this article I’m going to provide a few tips on how you can better manage your money and ad campaigns over various types of online marketing.
Know How to Budget Ad Campaigns
An easy way to blow through a lot of money is to create an ad campaign and not be patient. By this I mean you want to have as much information and stats as soon as possible. This is the wrong way to run ad campaigns. Instead, you need to focus on scaling out your campaigns at a very slow pace in the beginning and allow your campaign to grow and the data to trickle in. If you have a $500 budget, don’t run the campaign until the funds run out… instead, you need to set a lot daily limit, such as $10 or $25 a day. This way you can look at the data (traffic and leads) that have come in and see if you are anywhere near profitable. This allows you to tweak and split test your ad campaign for the best numbers so you can get profitable fast without spending too much money on data testing.
This is a perfect example of knowing your costs before they come into place. You may also want to check out Workday.com for software for expense management.
Keep Track of Your Monthly Spending
In the world of online marketing it’s easy to build up costs fast. From annual domain renewals, monthly hosting, software and tracking subscriptions and media buys… you can be spending money all over the place. It’s very important to make sure that you keep track of all of your spending and how much money is going where each month. It’s easy to start the month a few hundred or thousand dollars in debt just from these built in costs.
I like to use a credit card to pay for as much of my online billing as possible. This way I can log into my Visa credit card accounts and everything is already in there. I can scan through the list to make sure my charges are accounted for, and it allows me to break down my monthly and annual spending for tax time. Business credit cards are also great to have because many of them provide you with discounts and reward points, which can quickly build up if you are spending a lot of money online on advertising and business costs. On another side note, I also use business credit cards because they are almost always on your side when dealing with online buying problems and companies that don’t provide the necessary services. The benefits to using a credit card are much better than using direct payments from your bank account.
Plan Out Your Business Costs Ahead of Time
In the previous point I talked about keeping track of your monthly costs. It’s not only important to look at the monthly spending habits of your business, but also plan for the months and years ahead. We can use domains and hosting for example. Many of us like to buy domain names right when we think we have a good idea… then these domains end up sitting in our accounts and we waste a ton of money over the years. I have several hundred domains in my accounts, and with a $10 a year renewal fee, this adds up to several thousands of dollars a year in costs. This is a perfect example of knowing your costs before they come into place.
As you can see, there are plenty of ways to better manage the income, costs and overall financial situation for your business. As exciting as running your online business can be, it can be quite scary at the end of the year when you are filing taxes and haven’t looked at your income and spending reports for the year… only to find out that you actually made a lot less than you think you did!
Learn to manage your finances and your business will do the much better!
I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visaâ€™s. Visit https://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business. The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently. Every month, the Page will introduce a new theme that will focus on a topic important to a small business ownerâ€™s success. For additional tips and advice, and information about Visaâ€™s small business solutions, follow @VisaSmallBiz and visit https://visa.com/business.
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2 Replies to “How to Better Manage Your Business Costs and Spending”
Starting a business involves a lot of expenditure. You must know how to manage the cost & reduce this to minimum. Your article gives an insight on the topic & will benefit to the small business owners.
My recent post Top 5 Problems You Face While Starting a Small Business in India
You must develop a solid cost reduction plan that will allow you to control your costs. In your cost reduction plan, you will establish your goals and explain your forecasts. This plan will help you manage your expectations and, similar to a business turnaround plan, is flexible should the circumstances warrant some alteration.
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