Various things could impact the budget of a company. It might even be possible to end up with tons of debts and negative profits. It is common for businesses to find it hard to thrive for the first few months.
For most businesses, transportation costs usually eat up a huge chunk of the budget. Employees travel to different places to do market research or visit partners. Executives pitch their ideas to potential investors abroad. Some local meetings might also be a part of the regular schedule. Before you know it, you have blown a massive chunk of the budget on transportation. These tips will help reduce the cost of transportation.
Executives need to understand that their regular trips cause a significant hole in the budget. The problem is that they still fly business or first class even if they know that the difference in the cost of an economy flight is quite drastic. Therefore, the company needs to promote a culture where regardless of position, the employee needs to fly economy. It will significantly reduce the overall cost.
With the advent of modern technology that connects people anywhere in the world, you need to start reconsidering the idea of visiting another place when it is not necessary. For instance, instead of pitching an idea to a potential investor in Japan, you can do it over Skype. Instead of attending local meetings, you can opt for conferencing to involve everyone regardless of their location.
Talk to executives
These people usually cause the biggest expenses because they fly business class and decide to rent expensive vehicles when they are in another country. Although you might have attracted them to work for the company because of this benefit, you need to let them realise that things are different now. They cannot take unnecessary luxury trips any time they want.
Opt for car leasing
It is inevitable that you will use a car for travelling. Instead of spending money on a new car, you can consider cheap car lease deals instead. You will pay a monthly fee until you finish the lease, and you can decide to use a car model that suits your current needs. Since your business is evolving, the same car might not be useful anymore in the future. With a lease, it is okay since you can return the vehicle after the contract, and then find a new one. You may also negotiate the terms to make them suitable for the business.
You need to be reasonable in using your budget for transportation. You do not want to blow your budget because you or your executives are impractical. Let everyone understand the need to cut costs, and that starting with transportation is not a bad idea. Besides, everyone will benefit from this sacrifice in the long run. When the company sees profits, the employees could even receive a bonus. You could also re-invest to keep the business growing.