Seven notes of the deduction of the costs of your business

If your costs are higher than your sales, then no product and no supermarket will save your business. If your costs are low and give you a good margin margin, then you can stand firmly in any crisis. This axiom is tested by many amazing stories of ups and downs from the business world.

Since 2003, Google has remained one of the fastest growing and most profitable IT companies in the world, and its net profit is about 30% of its revenue. This state of affairs enables Google to hire the most professional employees and work on such futuristic projects as high-speed interplanetary Internet protocols and unmanned vehicles. But with Nokia, the history of the tragic bankruptcy did not happen so long ago, despite the fact that this company successfully adapted to changes in time and achieved success over more than a hundred years of its history.

Both of these outcomes with a probability of 50 to 50 can wait for your company. What are the reasons for the rapid ups and discouraging falls of companies? Undoubtedly, factors such as the quality and usefulness of the company's product, the team and personnel policy, and the perfection of sales and marketing play a big role in any business. However, another aspect often becomes decisive in determining the company's fate. About him not so often spoken, and they say as something for granted, uninteresting in itself.

And at the same time, this aspect is the flip side of literally any business. This aspect is a cost.
This article is for companies that are firmly committed to prosperity and are interested in mastering the art of using money. We call this de-pricing.

1. Be aware of the mission of the organization and classify all costs.

Many startups that have received investments do not succeed and are ruined. The reason is often that the founders spend money on everything, without a clear strategy.

The cost strategy of your company can rely only on one aspect - on the mission of your organization.
Let's give an example. Take two IT companies.

Company Mission 1: earn maximum profit by providing IT services to other companies.

The mission of Company 2: to solve the problem of inconvenience and high cost of using IT products, earning money from it.

Let's compare.

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What contributes to the achievement of your organization’s mission should be included in the cost strategy. What does not help to achieve the mission of your organization is excluded, even if similar companies have similar costs or in the business of your friends and acquaintances.

2. Write down the rules of work and exclude losses

One of the most frequent causes of budget gaps is unforeseen costs and expenses. To avoid this, write down a detailed costing rules and rules for allocating money for individual needs.
An excerpt of such rules - in the example below.

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Each employee of each department, if it is necessary to spend money on certain needs, contacts your accounting department and clarifies the possibility of this expenditure based on the level of expenses of the current month. If the expenditure is seen as necessary and at the same time exceeds the monthly limit, the employee will coordinate this expenditure with the head of the company.
This is how ordering costs work.

3. Keep records and analyze the excess

If you do not have reporting on income and expenses to your business, consider that you do not have a business. The form of the report can be different, in your company it should be clear and convenient to one person - you.
In your reporting on one sheet of the table, at least four of the six listed indicators must appear:
• Monthly sales plan
• fact of sales of the month
• Total expenses of the month
• Investments in this month from total costs
• Profitability of the current month
• Account balances
In short, you may have something like this report. God forbid that with comparable numbers.

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By keeping such a table every month, you will see the dynamics, and it will be easy for you to eliminate inefficient payments and quickly determine excessive spending.

4. Discuss all necessary expenses, conduct negotiations.

If you need to make a promo video for your company, and its cost exceeds your monthly marketing budget - do not rush to abandon the plan to make a video. Negotiate with the contractor, and it is better if there are several. Here are three classic savings techniques.

The first method of saving . Offer the contractor that you will do part of the work described by him yourself. For example, write a script.

The second method of saving . Bid between potential contractors and tell them about it.

The third method of saving . Ask for a discount for a faster signing of the contract.

Using these techniques, you will put all your necessary expenses in your budget. Verified by practice!

5. Do it yourself more

Often we think that we need to hire someone so that something is done for us, while in order to get it, hiring someone from the outside is not necessary. It is enough to master a few simple things, and you got what you want without great expense.

All successful companies apply this strategy. So, for example, we in GreenBusiness received SMM and email marketing. Maintaining our accounts on Facebook and vk.com, and maintaining our mailing and writing original articles for us was estimated at a monthly budget of 20,000 to 80,000 rubles per month. We learned everything ourselves.
By the way, it is quite easy and very interesting.

You can do the same with almost any line item. You should just remember your priorities and weigh the time resources needed to master the new competence.

6. Use creative approaches.

They say that in order to get into the media and thus get traffic to the site, you need a lot of money and a lot of money.

However, many people simply resort to creative approaches: they share non-standard views on famous topics, write provocative articles, introduce new concepts into public discourse - and thus get a “place on the podium”.
Remember the rule: creativity must be truly creative. And sincere. Then he will be noticed and evaluated.

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7. Keep your farm

Even if you are a company of three people, you need to show respect for your "materiel". Inventory your property. Fix your expenses for the office. Water the flowers. Follow the technique. When you pay attention to your household, every thing responds to you with a reliable service.

Compliance with the seven rules will provide your company with a 100% cost awareness, and very soon, managing the financial flows of your business, you will begin to experience amazing feelings from every waste: the joy of investment, confidence in the future and the feeling that everything is going as it should.