How to Prevent Fluctuating Budgets in Your Small Business

Imagine logging into your business email and seeing an email from one of your main system providers informing you that the price of your subscription service was going up, not next month but in a week.  Not to mention, that it was going up by $288!  What would you do?

Well this is a real scenario that happened to a client who uses a Software as a service (Saas) program.  Now granted, she had a number of licenses so theoretically her actual monthly increase was approximately $20.50.  The point is how would seeing an email like this one affect you? Would you go into a mass panic because funds are low or would you have already forcasted your expenses to know that you could afford the increase?  

This is a cautionary tale for those of you whose systems are all Saas based systems.  Now, don't get me wrong, there's a lot of value in Saas products and I use many of them myself, however when your entire suite of products is Saas based and there is a year of increase across the board, that can create a big hit on your business' bottom line.

So, below I have provided you with four key tips you can use in your business related to this scenario and Saas products as a whole:

Know Optional vs. Required Systems:  

You should always know what systems you have that are required to conduct or maintain your business and those that are optional in your business ecosystem.  Many learned in the past couple of years what systems they owned that were really fluff systems that weren't actually needed when they were forced to go lean.  I encourage you to always be as lean as possible in your business to eliminate unnecessary bloat that ultimately leads to what I like to call business process leaks.  The more tools you have the more communication paths and the more room for error.  Lets simplify these tools which inevitably will simplify your processes across the board.

Know Your True Requirements:  

You should evaluate your needs for a system prior to selecting that system.  This is a big problem I see on a regular basis both in big and small businesses.  You should let your process(es) guide your selection(s) instead of letting a product guide your processes. Often times the tools have way more functions and use cases than we need. This often creates shiny object syndrome which leads to you selecting a product that isn't really the best product for you just because it has cool features.  

By knowing your real needs and requirements you have a guide to compare all systems to without the bias of outside influences. I.e., the shiny new feature you've always wanted but aren't ready for yet or the fact that two of your peers use it and love it.  You can compare them side by side and then allow the bells and whistles to help break a tie.

Lower Your Risk with High Priority Systems: 

Whenever possible select Lifetime access or one-time purchases to meet your needs instead of Saas products, especially for required or highly important systems in your ecosystem.  This ensures you aren't held captive by software companies, especially if money is tight.

If you need to purchase a Saas product, purchase it for 6 - 12 month periods (or longer if it makes sense) so you can lock in a discounted annual rate.  This allows you to budget appropriately for 12 months at a time.  You also want to always begin your evaluation process at least 3 months prior to the expiration date (or more if a heavily used product or one you've had for longer than 2 years) to verify whether you need to maintain that relationship or find another product.

Conduct Annual or Triennial Evaluations

No matter which route you take, you should always consider doing a full system evaluation and review your system(s) at least every 3 years if not sooner.  Sometimes, we get so used to a tool that we don't see the forest for the trees.  We make due with a tool or system that just isn't meeting our needs anymore.  

Don't be afraid to shift or move when you see something isn't working any longer.  Just don't move with the wind, move with intention.

The content shared on DLMorales.com strives to teach side-hustling and full-time solopreneurs how to manage a successful business and life using holistic systems. The goal is to help you identify the right systems and processes so you aren't spending money or time on unnecessary things and instead can spend that time and money focusing on the things that are most important to you, your family.