No one wants to waste money when they donโt have to, but it is even more important that unnecessary waste is avoided when one is running a business because the more money you spend, the lower your profits will be and the harder it will be to make a success of your venture.
With that in mind, letโs take look at some of the most common ways that people waste money in their small businesses, so you can avoid doing the same and save more of your profits for yourself and your company:
1. Wasting time
They say that time is money and this is particularly true in the world of business. If you are taking more time to do anything from processing payments to creating new products, you are wasting more money in terms of employee pay utilities and so on. So, whether you switch to credit card swiping after looking at the arguments about swiping vs keying a payment transaction or you use automated software to cut down on the amount of time you spend doing your accounts, anything you can do to save time will undoubtedly help you to stop wasting money too.
2. Marketing to the wrong audience
Most business owners think that they know exactly who their target audience is, which means they think they know who to target with their marketing materials. Unless they have conducted significant market research, they are often wrong and they end up throwing good money after bad trying to chase the wrong clientele completely.
That is why it is always a good idea to take the time to conduct market research, engage with followers on social media and ask for honest feedback. Only by doing this can you get a true picture of who your target audience is so you can stop wasting money on marketing and start seeing real results.
3. Using paper
Using paper might seem like a completely normal thing to do in an office or business setting, and in the past it was. These days, things have moved on a little, and most of the things you once used paper for, from invoices to contracts, can be rendered digitally. Doing so will mean that you no longer have to buy reams of paper and ink, nor do you have to invest in lots of printers, copiers, and the maintenance of them, each year, which means you can save a surprising amount of money and do away not only with financial waste, but also physical waste which is bad for the environment too.
5. Recruitment
Many companies waste a lot of money trying to recruit new employees simply because they do not have a clearly defined idea of who they want to employ nor do they have a clearly defined idea of how to create recruitment materials that will attract the right people,
Not only that, but they do not conduct the right kinds of interviews and background checks to separate the wheat from the chaff and ensure they employ staff who will add value to the company.
Yes, it will take a bit more investment to do all of these things and do them well, ideally with the help of a good HR consultancy, but it will save you more money in the long run when you hire the right person the first time and you do not end up having to re-recruit again when they leave in a few monthsโ time.
6. Not tracking expenses
If you do not track business expenses very carefully to the number, it is really easy for things to get out of hand and for you and your staff to start spending more than is strictly necessary. Keeping tabs on this will help you to reign things in if people get a bit too spend happy with their corporate credit cards. Imposing strict limits on your corporate credit cards and accounts can also help to avoid waste and ensure staff only spend on things that are essential to them doing their jobs day to day. The more you know, the better you can avoid waste in the future – it really is that simple.
Saving money when you are running a small business is not always easy, but if you are spending money in any of the above ways, there is a good chance you are wasting more cash than you need to and reevaluating what you spend and where will undoubtedly help to boost your bottom line and give you more wiggle room. So, what are you waiting for?