7 Financial Planning Tips for Frugal Small Business Owners

To run a small business successfully, any entrepreneur must learn to practice sound financial stewardship—especially given the limited capital available to most small- and medium-sized enterprise (SME) and startup owners, among them thrifty and resourceful “Mompreneurs.”

Small business entrepreneurs often find themselves making do with whatever they have just to meet their commitments to their customers and stakeholders. However, some of the financial management strategies they choose to implement are more effective than others. The smart mompreneur should know the difference and be able to roll out a financial planning approach that makes the best use of her time and her available resources.

If you want to be frugal in your approach as a mompreneur and build a resilient financial foundation for your business, these are the planning strategies you should explore:

1) Focus on Liquidity and Cash Flow

A frugal, value-oriented mindset can be of great help in identifying low-hanging fruit for additional earnings and cost savings, making it immensely useful for helping stoke your business’s cash flow and liquidity. Implementing efficiency improvement strategies, like updating the existing POS (point of sale) system for your retail business, can go a long way in increasing your baseline earnings by reducing errors and freeing up time for other value-generating activities.

If you’re based in that part of Southeast Asia, getting a POS supplier Philippines-focused ventures depend on is a good first step towards improving your business’s finances. With a better POS, Philippines-based businesses run by mompreneurs like you can facilitate a full selection of digital payments, immediately increasing sales revenue and cash availability.

Solutions like Maya Business’s Maya Terminal device have proven to be especially popular for local SMEs and startups thanks to their ease of use, powerful features, and business-friendly rack rates that further increase earnings for each digital transaction. Look into a solution like the Maya Terminal now, especially if your mom-run business or family business operates from a brick-and-mortar storefront.

2) Compartmentalize Your Business and Personal Finances

While using your personal bank account for business might seem frugal, it can be among the most expensive mistakes you’ll ever make, and you’ll want to safeguard both your business and your family from the consequences. Establishing separate bank accounts and credit cards will simplify your accounting, saving time when auditing and preventing costly errors.

Separate finances also guarantee a more professional look for your mom-run business, ensuring better trust and stronger relationships with customers and potential investors. Most importantly, having separate personal and business accounts shields your personal assets from potential business liabilities, mitigating your risk in case of financial dispute.

3) Buy Used Equipment and Furniture

Plant assets like furniture and production equipment can be very expensive to acquire brand-new. However, the used market is full of high-quality items that can be acquired at a fraction of the cost of brand-new options.

Before making a significant purchase for your business, make it a habit to look for suitable, well-kept used alternatives instead. Consistently exploring the used market for big-ticket items should allow you to allocate resources more efficiently with little compromise to functionality, particularly in the early stages of your business.

4) Review Your Expenses Periodically

Running a small business while also raising your own family can be quite hectic, and it’s not unusual for recurring expenses to be forgotten or glossed over. Doing a monthly or quarterly expense review can help you identify areas where costs can be optimized, keeping your budget in check and contributing to ongoing cost savings.

Some cost-saving ideas you can explore include scrutinizing your recurring expenses, renegotiating contracts with your suppliers, and eliminating unnecessary subscriptions to business apps or services.

5) Limit Your Full-Time Hires

Most business owners start out with the idea of hiring a whole roster of full-time employees. But hiring full-time carries with it a lot of hidden costs that many small businesses—including those run by moms—are not prepared for. Before you start expanding your full-time staff, prioritize the training and development of existing staff so they can handle their responsibilities more effectively.

Also consider hiring part-time employees or freelancers for specific tasks and to address seasonal bumps in customer demand. This approach allows you to access the help you need without committing to the long-term financial responsibilities associated with full-time hires.

6) Lean on Low-Cost, High-Impact Marketing

There is a time and place for big-budget ads and high-profile celebrity endorsements. But for a frugal, mom-run business operating on a limited budget, the priority should be resourceful and impactful marketing.

Fortunately, we’re now in an era where low-cost, high-impact marketing is easy to implement. Try exploring social media marketing, search engine optimization, thought leadership, and email campaigns as alternatives to regular paid advertisements.

When done well, these methods can provide excellent returns on investment without the hefty price tag associated with traditional advertising. If your business caters to specific niches, like maternity-related goods or family wellness, high-impact marketing is also the best way to organically grow your audience and increase your revenue potential.

7) Embrace New Technology for Long-Term Cost Savings

Though eco-friendly devices dominate the conversation surrounding cost savings, it’s just as important to look at other emerging technologies that could potentially boost efficiency. For instance, cloud-based collaboration tools, project management software, and accounting systems not only enhance efficiency but also reduce potentially costly human errors, contributing to sustained cost savings over time.

Strategic Frugality: Maximizing Efficiency and Long-Term Growth Through Thoughtful Spending

Somewhat unintuitively, frugality is less about cutting corners and more about spending what you have on the right things. If you follow the tips outlined above and keep sight of what’s important to your mom-run business, you will be better placed to continuously expand your available operating budget.

In turn, the cumulative increases in baseline efficiency should allow your business to comfortably navigate short-term challenges—all while helping you meet your long-term goals for growth, sustainability, and your own fulfillment as a parent who’s pursued the entrepreneurial life.