The ‘Challenge Every Expense’ strategy for SMEs

If you have used a personal budget before, you might be familiar with the ‘Challenge Every Expense’ strategy. It is a budgeting tactic that asks you to carefully examine your expenses and cut away unnecessary expenditure, often readjusting the way you approach spending in your daily life.

This personal budgeting strategy for Aussie SMEs, helps identify unnecessary expenses and reduce spending in a time of financial instability. Create a business budget spreadsheet using the below guide to help you view all your expenses in one place.

3-Step Challenge Every Expense Strategy for SMEs:

Step 1: List every expense

The first step to reducing your business spending is to list out every expense that occurs weekly, fortnightly, monthly, and yearly. Collating a list of all expenses, which includes the frequency of payments, will allow you to compare the cost of these expenses over a year. As a business owner, you should also include any personal work expenses – e.g. buying lunch for the office with your personal card – which may not be included on your business accounts.

Step 2: Sort your expenses and remove non-essential spending

Once you have your list of expenses, the next step is to sort your spending into essential and non-essential categories. For example, essential expenses may include tax payments, office rent, business insurance, company cars, laptops, and computers, whereas non-essential costs could be excess office paper and stationery, business phones and unused company perks. When you create your own list, include a column which lists out the cost of each expense from highest to lowest.

Step 3: Find a better deal on essentials

Now that you have an organised list of expenses, you can begin cutting out non-essential spending and find better deals on your business essentials.

Even if you only save a few thousand dollars by committing to this strategy, it’s vital money that can be poured back into maintaining and growing your business, and you will benefit from adopting a mindset which questions the necessity of every expense in the future. For business owners in need of extra support, there are various financing options available.

Written by Helen Baker, a financial adviser, author, speaker and spokesperson for online finance information platform Money.com.au.

SHARE THIS ARTICLE

FURTHER READING

MST Marquee – The impact of migration on retail

Retail businesses setting budgets and forecasting are understandably finding it difficult to navigate the uncertain economic conditions. Our research can help educate retailers about industry profitability benchmarks, wage growth and inventory levels, so that businesses can better prepare for the future.

Now more than ever

If business, and retail especially, must reflect the zeitgeist in order to remain relevant, then in this unique inflection point in history, the rights of Indigenous people must be incorporated

Retail Voice CEO Message: 8 May 2024

Achieving a unified voice for retail has been a compelling focus for our industry for many years. It is in the spirit of this endeavour that we are delighted to

Retail Voice CEO Message: 1 May 2024

Yesterday, the Australian Bureau of Statistics released retail trade data for March, with a modest increase of just 0.8% compared to the same month last year, despite being bolstered by