If you have recently started a business it’s vital to excel in your industry by reaching financial goals without borrowing money. A simple way to achieve this in Melbourne is to design a strict budget and appropriately limit your spending. To ensure that your business stays debt free, we’ve created a guide for Melbourne business owners like yourself which will provide you with budget techniques to always remain profitable.

Calculate Your Business Expenses

No one business is the same in regards to spending and expenses. It’s important to take a specific look at your finances and fully understand all of your costs and how they impact your business. Examples of important costs to keep an eye on are:

• Taxes & Licencing Fees
• Utilities
• Supplies and Inventory
• Employee Payroll
• Trade Association and Union Fees
• Mortgage & Rent Costs

While these are just a few of the many costs that are necessary to keep a business running in Melbourne, they are vital to pay attention to and never fall behind on paying. By focusing on these costs and ensuring they are all paid on time and adjusting your budget accordingly, your business will be one step ahead of the rest.

Create a Spreadsheet To Properly Record Your Finances

Whether you are a financial novice or an expert, it’s important to keep thorough records of your businesses expenses and returns. The best way to do this is in an Excel spreadsheet that you can edit whenever circumstances change and can store your budget in one place rather than scattered throughout disorganised files and records. Scan and save all invoices for your records and label all folders appropriately with a date in the name. By having your budget and invoices in one location you avoid losing important documents and losing track of your spending.

Set Aside Finances For An Emergency

Running a successful business in Melbourne is a tough task, with plenty of bumps in the road which can set you and your business back if you aren’t fully prepared to face them. It’s never ideal to borrow money in these situations as interest rates are high and if you fail to pay the loan back in time things can get much worse. For this reason many business owners choose to set a small amount of profit aside each month to an emergency account which is designed to cover any unforeseen costs which may arise which cannot otherwise be prepared for. Avoid falling into unnecessary debt and put some money aside on a regular basis.

Cut Costs and Increase Profit

You have to spend money to make money, although your goal as a business owner should be to spend as little as you can to earn as much as you can. By having conservative spending habits and a tight knit budget in Melbourne, you can stay one step ahead of the vast competition and allow your business the room to grow in the future with the money you have saved and put back in.

Negotiate Appropriately With Your Suppliers

Try to avoid making long term agreements with your suppliers. While these agreements may seem convenient for you and your business, you are missing a big opportunity to cut costs by negotiating with numerous suppliers to get the best price. Before each shipment, take some time to review your prices and make the relevant phone calls to see if what you’re currently paying can be beaten by a competitor. By always negotiating for the best price, you are cutting costs and making room in your budget for growth.

Stick To Your Budget

It’s one thing to design a solid budget, what you need to focus on is staying on track with it in order for the desired results. As a business owner it’s your job to ensure than finances are managed correctly and budgets are maintained. A good way to stay ontop of your budget is to review it on a regular basis with trusted stakeholders who can offer their advice and collaborate to adjust finances accordingly.

Your Finances vs. The Businesses Finances

An unfortunate habit that many business owners have is not separating their own personal accounts with their business accounts. By treating the businesses money as your own, you run the risk of over spending and leading your business into debt. Add yourself to the employee payroll and pay yourself a wage that is sustainable for both your lifestyle and the business, remembering to keep a conservative attitude to luxurious spending, especially in the early stages of growth.

Melbourne is a busy city with countless thriving businesses all trying to compete. By being conservative with spending while cutting costs at all possible opportunities you can save capital and put it towards future growth. Avoid falling into debt with high interest rates on repayments by being realistic with your businesses finances through a well-planned budget and constant with an attitude towards growth.

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