As a small business owner, money is usually tight in your business and you want to spend only on what you need to. However, a vast amount of small business owners are unaware of how much money is going out of their business on unnecessary things. Are you one of the many business owners who are investing their capital into costly measures that will offer you no return on investment? Learn about some unnecessary tasks and procedures that your business could do away with to help you cut down costs and increase your positive cash flow.
One way you could be increasing the expenses in your business is by not keeping constant track of your company’s expenses. Money being spent and not being closely monitored, will lead to your cash flow being out of sync with both you and your employees possibly spending money that your business does not even have. Unfortunately, your business could be deep into the red before you notice that your expenses have eaten into all of your revenue. Whether the expenses are large or small, each one should be acknowledged and recorded so that your business is not spending money that no longer exists.
Another way your business could be wasting money is in hiring more staff than what is needed. You will mostly see large corporations that will have a manager or employee for every small area of the business, however, they also have the large capital to fund that many employees. Being a small business means that you will not be able to have that same luxury and it will be more cost effective to merge small jobs into one role. This not only keeps your expenses down, but also will give employees the opportunity to perform at their full capacity.
If you or an employee is taking on the role of completing accounting tasks, but the work is being done inaccurately it could be costing your business a lot. Cash flow issues is listed as the top issue small businesses owners face and having accurate accounting work done for your business is crucial in making sure to avoid cash flow issues. Having proper accounting practices being done regularly can help you make better financial decisions which leads to your business making more money. Not only that, but having your accounting work being done accurately in the beginning can help save your business a lot of money since you will be avoiding the hefty costs of having your accountant going back to fix inaccuracies.
As a business owner, your time is the most valuable in your business and if you are wasting time on non-revenue generating tasks such as bookkeeping, payroll, and taxes then you are not only wasting money but your precious time. Think of yourself as the highest payed employee, you should be spending all of your time focusing on sales, marketing, or services to customers that will help your business grow its profits. Think of this in another way, would you be paying a sales person top dollar to bring in more customers, but they end up doing more paperwork than sales? Would that not be a huge waste of money to your business? It is the same concept when you are spending your time on tasks that can be easily and affordably outsourced on a professional, so you can focus on the areas you’re most needed to help increase your revenue.
Marketing is critical to businesses, without it none of your customers would have even known your business existed. However, your business could be wasting money on marketing by investing in marketing strategies that do not give you a good return on investment, such as being on every social media platform but your target audience is only using one or two of those platforms. As a small business owner, you do not have the budget of large corporations that can easily waste money advertising on every available platform. Conduct customer surveys and other market research to ensure you are using the proper channels to reach your desired target customer, as this will keep you from wasting money on channels and strategies that will get you no results.
Your website could be another area in marketing you are overspending. Professional websites can range from anywhere between $5,000 to $10,000 on average. The good news is that now there are much cheaper options available such as Wordpress, Wix, Squarespace, etc. that allows you to custom build your website without knowing how to code and from a much cheaper price. Along with the website comes branding. You want your brand to be well-known, but rather than spend large amounts of money on ads to get the word out, instead focus on your products/services and giving great customer service. This will help you build a great reputation in your community, as word of mouth and referral marketing is not only more effective but essentially free.
Overpaying on your business’s insurance and taxes is another two areas that your small business can be wasting money. Are you absolutely sure you are receiving the most affordable rates for your business’s insurance needs? You may be able to find some great quotes online, but speaking with a professional insurance agent will help ensure you are paying the lowest possible for your insurance. For your taxes, the best way to ensure you are receiving all of the necessary deductions for your business is to have a small business accountant handle your taxes. They will not only help you save money of taxes, but can offer you year-round guidance on how to continue saving and growing.
Office supplies and equipment are necessary in starting and maintaining a business. But do not go off spending a fortune on getting top of the line supplies, equipment, or the nicest office space with the view. Instead, to help stay within a reasonable budget buy supplies such as computers or certain types of equipment that were pre-owned. Also look to shopping around for better deals on your office supplies, do not just go with the large company because everyone else uses them; you may find that your smaller, local supplier can offer you a much better deal.
Your business will need many expenses in order to properly operate, but that doesn’t mean you should be overspending on any area. Make sure your business and each department in your company have a proper budget and that the budgets are being adhered to, so your business is only spending on what it really needs. If you need extra help with cash flows and budgeting, an experienced accountant will be able to sit with you and prepare an efficient budget, while also helping you to save more by helping you cut out unnecessary costs.