For better, or for worse – business is always going to be about one thing. Money – the bottom line. No matter what we focus on, that is going to be the driving force behind everything.

When we think of a business, that means one thing. Whatever goals a business has, or whatever it aspires to be, money might be the main motivation behind it all. You can excel in customer service, you can make a great product, or you can bring an amazing idea to fruition, but if your business hasn’t got much money, it’s not going to last for long.

Harsh, yes, but what truth isn’t harsh? Money is the bottom line for business! That can be a huge worry for a business, or it can be a massive boost. It really does depend on how you view it. If you see it as a boost, you’ll appreciate that money is the bottom line and that there are things you can do to ensure your business survives.

If it’s a worry, it is likely because you didn’t feel that money would be the be all and end all of your business. You might have felt that you could possibly scrape by. Unfortunately, without money, you will not have much of a business at all!

As a business, you have one huge goal – before all others. You need to break even. What does that mean? Well, it means that each and every single one of your business costs (things like wages, products, rent) needs to be paid for by your income. This is no profit, no loss territory and it’s the aim of every single business worldwide – why? Because it means survival and that the business is on track. This is the goal, because every business wants to carry on so it can have a better chance of creating profit.

Profit is what is accrued when business income exceeds the business costs. Effectively, it is leftover cash. While profit is a great aim, plenty of businesses can take the pursuit of cash too far and leave themselves tightly strung in the quest to make as much money as possible. That’s why breaking even is the aim of the game, simply because it allows your business to breathe and be natural.

Profits can be cultivated by extreme actions in business (refusing to hire staff, scrimping on quality). This isn’t right, and your business shouldn’t do this. We want you to run your business the right way and aiming to make ends meet is the way to go about doing that.

Breaking even. If you’re going to spend 100,000 on your product, rent, staff and your own wages, that means that you need to make 100,000. Nothing less will work – that’s a loss. A loss year on year shows a decline for a business and a business that is losing lots of money won’t be around for very long. Worries can be found when a huge loss is made, but if the yearly total comes to a small loss, that only represents one thing – opportunity.

With a smaller loss comes the opportunity to make small improvements to run a healthy business instead of the drastic measures that will be required to fix a heavy loss. If your business has made a loss, you’ll need to look at how you can change things to ensure that it can make ends meet in time for the close of the next financial year.

How can you find what areas to change? Well – ideally, you will be budgeting. Budgeting translates your spend and income into raw data. Through this data, we can see plenty of patterns that reveal plenty about your business. It can show you where your business is spending heavily, and ideally areas where you can cut back and reign in your expenditure in business. It’s not just a case of identifying an area that your business spends heavily on and cutting all costs in that specific area, no.

That could spell disaster for your business! If a business decides to cut costs and reign in spending, it will need to do it both effectively and sensibly. Pointless cost-cutting can destroy a business and ruin its potential before it even gets off the ground. With the help of your budget and a good accountant, any business owner should be able to face the reality of business life and be able to cut costs down.

So, when you’ve got your budget laid out in front of you. You need to question it. You need to analyze it and extract the numbers and find the information that backs these numbers. Then you need to ask one question – ‘why?’

Your budget isn’t best placed to answer that question, but you and your team are. Why are we spending so much on delivery? Why is the payroll so high? Why are we spending a lot of money on that specific service? These questions should be answered and if the answers leave room for cost-cutting measures – go for it.

For example, if your payroll is too high, you might be overstaffed and need to act on that by releasing employees so you can reduce your payroll costs. If you are spending too much on office materials, see if you can cut costs with sites like DontPayFull.com.

Each of these questions posed to your budget and your spending has a valid answer, and sometimes, that answer gives scope to an effective cost cutting measure that can help turn your business into something that runs sustainably, instead of one that wastes money. You can cut costs in error though, some businesses have a high payroll and fix that by needlessly sacking a bunch of employees – bad news for morale and public relations!

Every business at some point needs to look into cutting the costs of its operating budget so it can run without operating at a loss, that’s just the reality of business. However, you can do this the right way – or the wrong way.