Revenue and expenses are a core part of running a business. You can operate your day-to-day business activities smoothly if you keep them in balance. You can employ several strategies to control your expenses and help grow your revenue.
The path to business success is a long and tedious one, but it's not impossible. Business finances are messy, and here we have some tips to help manage them effectively. Revenue and expenses go hand in hand. Take note of these tips to help you handle them better.
Expenses will play a huge role in your financial health. Expenses are costs that a business incurs to pay and run business operations. This covers everything from paying your rent and buying equipment to costs for packing and shipping.
Here are some suggestions for managing your company's expenses.
One of the most effective ways to have control over your budget is to start with a plan and stick to it. Creating a budget should be practical and applicable to your industry. You need to research your spending patterns and behaviors in order to develop a successful plan.
Annual budgeting is most common, but unforeseen circumstances could make you go off budget. You can control your expenses by drawing up monthly budget plans. This way, you can review and see if you are on track with your overall budget.
But more significantly, you must adhere to your spending plan. Making a budget is useless if you're not committed to sticking to it.
Make it a habit to keep all your receipts. You can record them manually or invest in software to help keep track of your expenses. Software features allow you to capture photos of receipts and store them as data so you can guarantee you don't lose your records.
Furthermore, documentation of expenses is also helpful for taxes. Certain operating expenses can be eligible for tax deductions to lessen your tax liabilities. Keeping a detailed track of your expenses helps you see the areas when you could be overspending to help you strategize your spending patterns.
Many business owners don't pay mind to fixed costs since they are recurring payments. Fixed costs often come from partnerships between merchants and suppliers. After a while, you will think you have a good deal with your suppliers if they don't change their prices. But it would help if you check market offers periodically.
You can start reducing expenses by finding better deals regarding your fixed costs. Get regular quotes to ensure that you are spending your finances correctly.
It's understandable that most business owners believe manual processes are cheaper. Imagine if you have a small business with a dedicated team for packing and shipping orders.
Advanced equipment may look like massive investments at first, but machines can do repetitive tasks equivalent to several people. This means you'll need fewer people to hire, which saves money in the long run.
Business revenue is the total income a business generates from its product sales or by providing services. Revenue is also known as gross income and referred to as the top line because it is typically seen on top of an income statement.
On the other hand, profit or net income is a company's total earnings after business expenses have been deducted. The balance between gains and losses will keep a business running. Here are some helpful tips to generate revenue.
Most companies spend time and assets to gain new customers but often neglect customers to repeat business. Building trust with your consumers will drive them to use your services again.
One effective way to persuade your customers to repeat their purchases from your business is through email. Once your clients join your email list, it allows you to communicate with them. You can solicit their opinion and keep them informed about special offers and new products. They are more inclined to repurchase your goods or services once you have earned their confidence.
Who can resist coupons and discounts? You can use this strategy to funnel sales to your business. Of course, you have to be smart about it. You won't be making sales if all of your customers are granted discounts.
Your most devoted and active clients may receive discounts. These can be used as a thank you gift for buying your products. You can also give discounts to people who purchase a certain amount. For example, you can have promos for people who purchase more than $300.
Coupons, on the other hand, are great for new customers. For example, first-time buyers can have a 5% discount on their first purchase. Coupons such as this will entice new customers to try and purchase your products.
In the United States, over 70% of people prefer to shop online, if you don’t have a well-built website, your competitors will surely outshine your business. Easy navigation and positive user experience can encourage customers to purchase from your business.
Make sure all elements in your website are working and reflect the branding of your business. It should contain all the information your customer needs and make the purchasing process easy for them—from choosing the product or service to processing their payment.
Juggling and managing your time with running a business is a difficult task. You may not want to admit it, but there are other aspects of your business that you fail to give attention to. Marketing your business allows you to gain customers. More customers mean more income.
However, marketing is challenging with so many things on your plate. Instead of forcing yourself, outsource your marketing needs to a professional. These services can guarantee that your investment is worth the price and will help scale your businesses.
You reach more customers as you venture further. Consider opening new branches in different cities if you have a physical store to attract more clients. For your ecommerce counterpart, you can widen your shipping options.
Small businesses usually start deliveries locally, but you can extend your reach nationwide or internationally. Look for shipping partners that will give the best deals to help you reach more customers.
Even big companies use this strategy to increase their total revenue. Offering a higher-priced product can help simple transactions turn into valuable ones. The process of upselling is offering your customer a better version of their original choice. A great example is mobile phones. Companies usually offer products with bigger memory or better performance for a higher price.
Just remember, when you upsell your products, it should be something related to the original choice to find success in your upsell strategy. If they are buying a mobile phone, upsell a better version—not a laptop or other types of gadgets.
Managing your expenses and revenue also includes accounting. Accounting helps owners see their company's financial performance and prepares their business for tax season. When it comes to accounting, Unloop offers different services for small ecommerce businesses.
If you need help managing your revenue and expenses, our bookkeeping services will help you keep up with your business finances. Our services include:
Keeping track of how much your company earns and spends in a specific period keeps your business operations steady and running. Managing expenses and revenue is a challenge, and we hope these tips help you understand and handle your finances better.
For more accounting services, Unloop also offers payroll, taxes, forecasting and accounts payables. Book a call with us now and talk to an expert for free!
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.