Managing the finances of a business is like running a tight ship. Especially for smaller businesses, you have to be more careful about managing your finances. This is critical not just to keep your earnings strong, but to also keep your business running smoothly. Otherwise, when your budget continues to bleed regularly, you might be mistakenly spending more in some facets of running your business than what you actually ought to.
The first step to being smarter about your financial expenditures is coming to terms with the various ways you may be wasting money. Perhaps, for the longest time, you haven’t been aware of alternate methods, sources, and methodologies that aren’t just more effective, but also more cost-efficient as well.
Are you aware of the different ways your business might be wasting money? Here’s a list of those ways and what you can do about them:
1) Renting Expensive Office Spaces
Office and commercial spaces nowadays are very expensive. If you’re a small business renting a space, you might find that a bulk of your expenses goes to the rent. But, come to think of it—are you sure that’s the only option for an office space to rent? Do you really need that big of a space? Or, are there are other cheaper and smaller options that could work just fine, for the time being, while your business is still small?
You may be wasting too much money on an office space that’s too expensive and too big for what you actually need. What you can do, instead, is to downsize or look for a cheaper option, especially if the location isn’t much of an important factor for your business, anyway. Or, perhaps, you can find rent-to-own options or mortgage options for commercial properties, which, still, cost less than renting. With that choice, the money you’re paying for isn’t wasted as, in the future, the property becomes yours anyway.
2) Expensive Technology Fees
In today’s time, it’s almost impossible to run a business without using and paying for technological tools and software to assist with operations. But, not all of those tools may precisely be what your business needs. Or, you could be wasting money on technological tools and software you’re not making the most of.
A better solution is to strike that perfect balance of paying for tools and having the right staff. For instance, with accounting, don’t leave it all to technology. You still need to have a physical accountant or bookkeeper for this purpose. The benefits of a bookkeeper far outweigh the expenses paid for their salary and benefits. But, you can make your business more efficient by providing your accountant with software and tools to speed up their job. Just be sure to sign up only for the software that you absolutely need.
3) Wasting Office Supplies
One of the top pervasive costs in a business concerns supplies. Perhaps, you’re using way more than you ought to at any given day. Or, your staff is printing documents that don’t necessarily have to be printed. When you’re in the retail and wholesale business, it also follows that you may have a lot of boxes for packaging purposes. If you’re merely throwing them away, that’s another area of waste.
Office supplies may seem to only amount in little waste at a time, but when you add them all together, it can actually be a lot! Fortunately, you can significantly reduce office waste by choosing more eco-friendly practices, like printing on both sides of the paper. Or, if memos and messages can be sent through email, do so. There’s no need to print every single document. Also, it’s a must to reuse box packaging whenever applicable.
4) High Employee Turnover Rate
If your business has a high employee turnover rate, then, unfortunately, you’re also wasting too much on your HR expenses. Hiring employees is an expensive process. There are expenses in the interview process, selection process, and even with onboarding. If employees aren’t happy with your business, they’ll be leaving regularly. This means you’ll have to keep hiring new employees repeatedly.
When this is a dilemma now for your business, you need to rethink the way your employees are managed. Start by providing them with good benefits and incentives. Then, focus on activities and measures to keep employees happy and healthy. When they’re happy with your team, this translates to higher productivity and better results for your organization.
Without a doubt, one of the universal top concerns for any business is always the business budget. If you want your business to stand the test of time and grow, it’s important to keep track of the finances. This means being more controlled toward the expenses, as well as doing an audit regularly to ensure no part of the budget is being wasted.
The list above contains only some of the ways your business might be wasting money. It’s for you to re-check your own and ensure you aren’t committing any of the said wasteful practices.