That being said, many business owners are failing to do their research – a task that could cost them thousands of dollars in the long-term. Instead of analyzing their current costs, many opt to purchase new products at the lowest price they can find. While this is a good idea, it should only be done once you’ve streamlined the current things you’re spending money on to avoid wasting finances at present.
In this guide, we’ve shared five areas in which your small business could be wasting money, along with the techniques you can use to cut costs and boost profits.
#1. Stationery supplies
Think about the last time you wrote something down on a piece of paper. If you can’t remember, you’re not the only one.
Just like at the start of a new school year, many small business owners run to a stationery shop to fill up on paper, pens and other unnecessary items because it makes them feel organized and prepared. However, the majority of the supplies will be left rotting away in a drawer, unused for months.
In an age where almost everything seems to be done online, think about whether or not stationery is a necessity for your small business. Do you really need to write notes down or can you record them on a Word doc? Do you need to store your contact details in a physical folder or can they be added to a digital address book?
Once you’ve whittled down the true necessity for stationery supplies in your office, you’ll realize how much money you could’ve been wasting by repeatedly purchasing these items in future.
#2. Recruiting new staff
Even though recruiting new members of staff is a painstaking process, it could be a money-draining hole for your small business.
As a business owner, it’s unlikely that your specialty will be recruiting members of staff. You may also be pushed for time and feel like you aren’t able to manage another task, but it doesn’t mean that you have to look towards paying expensive fees for a recruitment agency to do the job for you.
Instead, do a little bit of DIY whenever you have a bit of spare time. Write your job ad and post it on free sites like Indeed or TotalJobs, then share it on your company’s social media accounts. Once the word is out there that you’re hiring, you shouldn’t be struggling to find willing applicants!
Then, take some time (or ask another member of your team) to review the resumes that you receive. Once you’ve got the shortlist, it’s time to finish the job and start interviewing. Who needs a recruiter?
You should also think about the amount of money that your business is spending on utilities each year. The chances are, you’re paying for energy that you aren’t using.
Although this tip is mainly reinforcing common sense, you should follow general techniques to reduce your business’ utility bills. Turn off lights when they’re not in use or use motion-sensor lights, and think about opening or closing your windows to control the temperature of your working environment.
Going a step ahead, you could also think about larger improvements that would affect the long-term utility bills that you could potentially be wasting money on. Installing solar panels on the roof of your business’ property is a fantastic way to do this and offers a way to generate another revenue stream when you feed excess electricity back in the National Grid.
Plus, the Government predicts that 4% of electricity could be from solar power in 2020 so there’s no better time to get ahead and implement them into your utility sources.
#4. Computer software
As we mentioned before, digital is taking over. With an app for everything and someone online ready to answer any questions you may have, it’s a good idea to analyze the computer software that your small business is using.
Look at your bank statements over the past six months and write down a list of software that your business is paying for, as well as how many times a month you actually use it. This can be anything from payroll software to social media scheduling tools.
Once you’ve got your list, you may find that you’re paying for software that you’re not even using. In this case, cut your ties and cancel your subscription.
If you find that you’re paying for a subscription but only using it rarely, get in touch with the company and see if they can offer you a better rate for your smaller requirements. Although it may be a cheeky technique, it’s a fantastic way to cut costs!
#5. Marketing strategies
Is your business spending money investing in marketing efforts that don’t show any form of results? Unlike spending money on SEO where efforts can take a while to pay off, some forms of marketing should show near-instant results. If you aren’t, the marketing strategy may be a money-waster.
To analyze if your small business is wasting money on marketing, think about the strategies that you’re investing in. For example, you may be spending hundreds of dollars a month on Facebook advertising but seeing little traffic come from the platform. In that case, either reevaluate your strategy and try new techniques or hold off on continuing until you find a profitable way to do it.
As you can see, it’s important to regularly assess your business’ expenditure to ensure that you aren’t wasting money unnecessarily. Make use of the current tools you have and get them at the best price before planning to invest in more.
Then, once you’ve nailed down your costs and found a way to sustainably run your business, you should be seeing a boost in profits in no time at all!
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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