How to Manage Office Expenses When Scaling a Small Business

Scaling your small business can bring new exciting opportunities however there will be new financial responsibilities that you need to consider. As your teams grow, you’ll likely have to consider how much space you need to rent for your office, the number of pieces of equipment you want and more recurrent costs. Understanding how these costs will affect your profitability will help ensure your employees have the tools they need to be efficient.

Having a clear strategy in place will ensure you’re able to stay financially stable, spot any unnecessary costs and ensure your business can scale without running out of money. Creating budgets, keeping track of purchases and regularly reviewing your business’ costs can help you scale your small business whilst keeping your office costs under control.

Establishing a Realistic Office Budget

Start by taking a look at what you’re currently spending on your office. Take note of your rent, utility costs, internet, cleaning, equipment costs, stationery, furniture and any other costs. Looking at your costs for a few months will show you what your average is and what costs fluctuate throughout the year.

This can give you a good idea of what extra money you will need to pay for as your business grows. Taking note of what your fixed costs and variable costs are will also help you understand what your business will consistently have to pay and what costs could go up depending on how many employees you have.

When scaling your business, there will be costs you incur before you see more revenue. For example, if you’re bringing on new employees you may need extra desks, computers, software subscriptions and more space. If you’re opening another location then there will be costs such as deposits, installations and utility costs.

When planning your costs, think about what realistic goals you have and how much you expect to spend. You can create a monthly or quarterly plan to show what you’ll be spending on hiring new staff, new equipment and how much your office space will change. Adding in some buffer money will also help ensure you can cover any unexpected costs for repairs, price rises or short term cash flow issues.

Controlling Office Supply Purchases

If you don’t keep track of what you’re buying for your office, your stationery costs could be high. If you don’t know what stock you have in, employees may buy duplicates. You may also run out of frequently used items and have to quickly buy them at a high cost.

Keeping a simple log of your stock will help you keep track of what you’re using. This will help you understand what the most popular products are and when you need to reorder. Assigning someone to manage your stock will also help stop you from buying unnecessary items. Regularly reviewing your stationery usage will help you see if you’re spending too much and if you’re wasting certain products.

By comparing what you’re paying for your products, you can help reduce costs without affecting your day-to-day operations. If you’re looking to buy office supplies online for your business, like many Canadian businesses, you should consider if your supplier offers reliable deliveries, consistent pricing and good returns. If you’re frequently using a product, you may want to buy in bulk to help reduce your costs.

However, you don’t want to be holding too much stock as this can cause cash flow issues. Buying from office supplies Canada can also help you easily compare different products and prices. However, you should consider how much you’ll be paying for postage, minimum orders and how quickly you’ll receive your order.

Managing Workspace and Utility Costs

Your office space can be one of the biggest costs. Regularly reviewing if your office space is right for your business will help you stay on top of your costs. Your office may be too small for your new team members causing inefficiency.

Or you may have a large commercial lease that isn’t needed if many of your employees are working from home. Before committing to moving to a larger space, consider if you can use a shared office, flexible lease or redesign your office to fit your new team. Checking your lease, renewal date, maintenance and if your rent will increase will help you avoid any surprises as you grow.

As your office space increases, you may find your utilities and maintenance increase. Computers, lighting, heating and cooling can all contribute to your monthly costs. Using energy efficient lighting, keeping your heating and cooling well maintained and having good habits around turning things off when they’re not being used can help reduce your costs.

Regularly maintaining your office will also help prevent small issues becoming expensive to fix. Looking at your utility bills will help you spot any unusual increases. If possible, review your service providers to ensure you’re getting the best value for money.

Controlling Equipment and Technology Spending

As your team grows you may find you need extra computers, monitors, printers, phones and furniture. You shouldn’t feel pressured to buy everything straight away. Instead, create an equipment plan. Consider how many people you’ve confirmed you’ll be hiring, what you have in stock and how long your current equipment will last. Some equipment may be able to be reallocated, upgraded or repaired.

Comparing your costs of buying with your maintenance costs will help you see what is the most cost effective option. Creating standard equipment will help you easily purchase what you need and reduce any compatibility issues. This will also help you prevent employees from buying unnecessary expensive products.

As your business grows, you may start to see your software subscriptions increase. You may be investing in new communication, accounting, project management, cyber security and customer service tools. Departments may be using different platforms for similar tasks leading to duplicated costs.

By regularly reviewing your subscriptions you can see if you have any unused accounts. This will help you see where you can reduce your costs. You should also consider if your price has increased as you add more staff members or use more data. Consider if you can streamline your tools to reduce administration and subscription costs. However, when considering changing your software, think about your costs of migrating, training and security.

Establishing Purchasing Policies and Accountability

Creating clear rules will help your employees understand what they need approval for. Creating a spending limit, assigning who can purchase items and asking for receipts will help. Larger purchases may need approval from your manager/owner.

This will help reduce any unapproved purchases. Keep your rules realistic and update them as your business grows. Assigning people different responsibilities will help your employees understand what they need to do. Be clear with your rules to ensure your employees know what they need to do.

Keeping your expenses in one place will help you keep track of what you’re spending. Using accounting software or expense management tools will help you keep your costs organised. This will help you see what each department, category, project or location is spending.

Keeping your categories consistent will help your management team understand how much they’re actually spending compared to their budget. Having digital receipt and approval records will also help ensure you don’t miss any documents. Having all your financial information in one place will help your owner create reports quickly and make informed purchasing decisions. Ensure you have the right permissions in place to protect your sensitive financial information.

Reviewing Performance and Adjusting Spending

Regularly reviewing your expenses will help you stay on top of your costs. By looking at your monthly reports you can see if your stationery, utility, repair and subscription costs are increasing. Comparing your actual costs to your forecasted budget will help you understand where the increase is coming from.

This could be due to your business growing, price increases or poor purchasing. Don’t just cut all your costs that are over your budget. Instead ask your managers to investigate why they’re increasing. Some costs may be increasing due to necessary investments. Understanding why your costs are increasing will help you see what costs can be avoided.

As your business grows, your priorities may change. If you’re looking to hire multiple employees, you may need to invest in more equipment and space. If you’re investing in your digital services, you may not need as much physical space. By regularly reviewing your budget you can reallocate your money. Try to reduce costs where there is wastage, unused equipment or poor purchasing.

By linking your expenses to measurable goals, your management team can ensure your operations remain high quality whilst improving your financial efficiency. This will help ensure your office costs are helping your business grow sustainably.

Conclusion

Keeping your office costs under control as your business expands can be done by having clear planning, accurate records and informed purchasing. Creating a forecast, keeping track of your stock, regularly reviewing your space, managing your subscriptions and having clear rules will help keep your small business finances under control.

By regularly reviewing your expenses you can spot any inefficiencies and by having a flexible budget you can adapt to your needs. By keeping your spending under control, you can ensure your cash flow remains steady, your employees are productive and more money can be invested into the areas that will help your business grow.