One thing you absolutely don’t want to do as a business owner is waste money. The more money you “throw away” needlessly, the lower your profit margins will be and the more difficult it will be to invest in the growth your business needs to succeed in the long term.
Here are some of the most common areas where business owners tend to throw money away, so you can avoid doing the exact same thing in your company.
1. Not Tracking Every Expense
This one’s basic, but it’s a doozy. That $5 pen? That $10 snack for the office? They all add up. If you aren’t keeping an eye on your outflows, you could be bleeding money. Use apps or accounting software to help you keep track. Remember, in the world of business, every penny counts.
2. Ignoring Tax Deductions
Tax time can be stressful, but it can also be the season of overlooked savings! Chatting with an accountant can help you understand all the potential deductions you might be missing. Your future self will thank you.
3. Skipping Out on Employee Training
It might seem like an unnecessary expense, especially for small businesses, but a well-trained employee is efficient, makes fewer mistakes, and can handle a wider variety of tasks. The investment pays off in the long run. Plus, nobody wants to be the company known for having a sloppy approach.
4. Wasting Fuel
Do your employees drive for work purposes? Whether it’s delivery trucks, company cars, or just the occasional errand, gas expenses can accumulate fast.
One way to curb this cost? Fuel cards for small business. They often come with discounts, can help you track fuel expenses, and some even offer reward points.
5. Not Reviewing Supplier Contracts
Got a long-standing relationship with a supplier? That’s great! But don’t let loyalty make you complacent. Regularly review contracts and renegotiate terms.
The business world is dynamic, and you should be too. Some suppliers ensure their loyal customers get access to all the best deals, while others take advantage of their complacency by simply hiking up prices over time. If you don’t keep an eye on things, you won’t know which kind of deal you’re getting, and you could well end up wasting money.
6. Using Fancy Tech You Don’t Need
We’re all for the latest gizmos and gadgets, but only if they bring value to your business. That state-of-the-art espresso machine might look great in the office, but if it’s just making coffee for one, it’s probably not a smart spend.
Focus on the things you really need, especially when you are just getting started, and you’ll have more success in the long term, which means being able to afford a few nice extras.
7. Not Using Free Marketing
Social media isn’t just for sharing cat memes (though we’re totally here for that). Platforms like Instagram, Twitter, and LinkedIn are goldmines for free marketing.
Engage with your audience, share your story, and watch your brand flourish without emptying your wallet. Obviously, you may need paid advertising some of the time, but if you really learn how to use social media to your advantage, this will be less often than if you don’t. Thanks to many online resources, learning how to be a social media pro has never been easier.
8. Avoiding Outsourcing
You can’t be an expert at everything, and that’s OK. Sometimes hiring a freelancer for a project or outsourcing a specific task is cheaper and more efficient than trying to tackle it in-house.
This is especially true if you’re wasting time that could otherwise be spent on trying to get it right and failing, or if you’re spending a fortune hiring someone who can do it for you on staff, where they’re only needed sporadically.
9. Not Surveying Your Customers
Feedback is gold, and it helps you understand what you’re doing right and where you might be missing the mark. Ignoring this resource can cost you in lost sales and missed opportunities.
So, even if it might not seem like a priority when you have a million and one other things to do to keep your business afloat, focus on what your customers think of you to increase loyalty and future sales.
10. Sticking With Outdated Equipment
It’s a tricky balance. You don’t want to splurge on every new piece of equipment that hits the market, but using outdated tools can decrease efficiency and increase maintenance costs. Periodically assess the tools and equipment you use and determine if an upgrade is in order.
11. Renting Expensive Office Space
In this digital age, do you really need that swanky office downtown? Maybe, maybe not. Some businesses thrive in a remote work model, cutting down hefty rental costs. Assess the needs of your operations and see if there are ways to cut down this significant expense.
12. Falling Into the Sales Trap
Just because something is on sale doesn’t mean it’s a good buy. Discounts can be tempting, but if it’s not something your business genuinely needs, it’s money down the drain.
13. Not Setting a Budget
This might sound like Business 101, but you’d be surprised how many companies operate without a solid budget. This is like trying to bake a cake without a recipe: messy, unpredictable, and with a high chance of failure.
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