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When it comes to scaling a business, managing finances effectively is crucial for success. As a business grows, so do its expenses, and without careful management, costs can quickly spiral out of control. But how can you keep costs under control while expanding your business?
Below, Rolling Stone Culture Council members share expert tips and insights for managing costs wisely when scaling your business. From tracking expenses to optimizing processes and negotiating with suppliers, these strategies can help you build a sustainable business while keeping your finances in check.
Only Spend the Money You Have
You simply need to spend the money you have, not the money you think you have or the money you think is coming. The truth is that people are unreliable sometimes. Clients don’t pay their bills on time or they simply don’t pay. It’s a terrible thing in business. So, until that money is in your bank account, don’t spend it! – Nicole Rodrigues, NRPR Group
Focus on Critical Areas First
Prioritize and invest in the most critical areas first. Narrow the focus to the aspects that drive growth and profitability, then allocate resources accordingly. By focusing on these key areas, you can maximize the return on your investments and minimize unneeded expenditures. This approach helps maintain financial stability while your business can continue to grow in a sustainable manner. – Joshua Adragna, Eyerate
Prioritize Business Needs Over Wants
Don’t spend what you don’t have and have funds for your business. These two bits of advice sound so practical and old school; however, the advice is as wise as it has always been. Put away money for your business just like you would save for yourself. You’d be surprised how much stress that eliminates. Think about what your business really needs as opposed to what you really want. – Ginni Saraswati, Ginni Media
Increase Efficiency Through Technology
To manage costs while scaling, embrace technology as a key strategy. Utilizing software and tools to streamline your operations and automate repetitive tasks can help you save time and money, allowing you to focus on growing your business. By implementing the right technology solutions, you can optimize your processes, increase efficiency and ultimately achieve greater profitability. – Elan Jacoby, Vintage Amp, LLC
Consider Your Return on Investment
Calculate all of your expenses in terms of ROI. Some expenses just don’t make sense financially until you have critical mass, so you might need to sideline them until you have more income to allocate. – Adam Ayers, Number 5
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Develop a Data-Driven Culture
Discover trends, uncover patterns, reveal opportunities and generate evidence-based foresight. Brands with a data-driven culture make faster, better and more informed strategic decisions. Real-time data have an important story to tell — you need to give them a voice. – Igor Beuker, Igor Beuker
Adapt When Necessary
With any startup, keep a mindset that cash is always at a premium. Flexibility is critical, especially as you iterate with your growth initiatives. Plans and people may need to change quickly, so ensure you protect yourself and your company. – Michael Klein, cannabisMD
Ensure You’re Cutting the Right Expenses
Keep in mind that “necessary” expenses and “unnecessary” expenses can have some overlap, so plan accordingly. Cutting “unnecessary” expenses like employee perks or altruism efforts might save money in the short term, but they are part of what makes your company a great place to work. It’s important to maintain your brand integrity and ethos even as you grow. – Evan Nison, NisonCo
Automate Easy Tasks
Leverage the Web3 tech that is available at your fingertips to prioritize automation and process optimization. Blockchain and AI can help businesses automate repetitive tasks, reduce operational costs and improve efficiency. When you streamline processes, it minimizes errors and optimizes resources, which means you can scale sustainably. – Jessica Billingsley, Akerna
Regularly Review Recurring Expenses
Stay on top of your recurring monthly expenses. Keep track of all the tech tools, subscriptions, platform charges, websites and bank fees. Keep an updated itemized spreadsheet and review it at least once a quarter. The big investments are evaluated with scrutiny. It’s the cumulative smaller monthly expenses that often get overlooked. They add up and can eat into your profit margins. – Traci DeForge, Produce Your Podcast
Do Some of the Work Yourself
Managing costs correctly is one of the most important aspects of growing a business. At times I tried to delegate too much work instead of saving costs by doing more of the work myself. Stay small in the beginning and make sure you don’t overdo hiring and delegation. The lighter you sail, the faster you’ll move forward. – Christian Anderson (Trust’N), Lost Boy Entertainment LLC
Partner With the Right Supply Chain
Don’t overstock inventory. Find a supply chain that will work with you that has great delivery timelines and costs. This way, you can “pivot on a dime” when necessary. – Susan Johnston, New Media Film Festival®
