Many online sellers are running small ecommerce businesses. There are a good number of sellers who take the avenue to make some extra money on the side to supplement their regular income. Getting a loan and other finances can be difficult. This being the case, these sellers run things on a tight budget.
Planning your budget helps reduce unnecessary expenses thereby expanding your profits. BT has drawn up a list of things you can do to manage your funds. Here goes:
1. List your expenses
Start keeping a record of your outflow. Make a list of your regular monthly expenses and allot the resources for them at the beginning of the month. This will help streamline your capital to vital quarters. Keeping a record also helps prevent unnecessary expenses. Maintain this on your own to begin with and once you scale up, you can appoint an accountant to allocate expenses.
2. Your debts are your priority
Work towards paying off your loans before you factor in anything else. If you have taken any loans, clearing them off should top your list of expenses. Debt is a liability, and the faster you clear it off, the more funds you will have at your disposal.
3. Insure your business
You might think that you can skip this step as you operate on a small scale, but someday you will thank us for this tip! Having a suitable insurance for your business will help you in case of any untoward or unpleasant incident.
4. Update your budget every year
Plan to grow – that will help you actually grow. For this you must modify your plan periodically. Provide for an increase in your capital each year. With the rising prices of commodities, this measure is important for you to be up-to-date on your expenses.
5. Have an emergency fund
Business is unpredictable, and there can be a lot of unexpected expenses. Keep aside a fixed sum each month to cover unforeseen or emergency situations. You can create a recurring deposit in your bank where you put in a fixed amount each month. The interest amount is not much, but wouldn’t you rather get a small interest than let it sit idle?
Where can you save?
There are some expenses that you can avoid:
Automate processes wherever possible so that you can save on the manpower. Some software might appear to be expensive, but in the long run, it will be a minimal investment compared to recurring salary to an employee.
Advertise through social media rather than spend heavily on advertisements, use Facebook, Twitter, Pinterest, and to an extent LinkedIn to spread the word about your business. There are several small scale businesses that have flourished thanks to the modern word of mouth. You can provide for paid promotion on social media in your budget once things start picking up.
Buy in bulk. Things are always cheaper by the dozen. Take some trouble to locate wholesale markets in your city to source your products. Establish a network of wholesalers from whom you can ask for favours now and then.
Exercise prudence when buying business requirements like visiting cards, apparel tags or name boards. Rather than stepping into your nearest GK Vale or Printo, trek to local printers who will give you good quality stuff at a reasonable price.
We hope this guide has given you an idea on how to manage your funds. If you need help on anything specific, give us a shout. We are Browntape, India’s largest ecommerce service provider, and are there to help you with all your ecommerce needs.
