Wasting money is an awful feeling that no one likes to have. As an entrepreneur, you’d undoubtedly want to put extra money towards pulling in additional customers or targeting your key demographic. When you’re putting your money towards unnecessary things, you’re unintentionally cutting out the amount that you have to spend on the necessities that are going to cause your business to flourish.
Cut Employee Costs
Many small business owners such as yourself might not realize it, but it’s possible to cut certain costs when it comes to the staff that you hire to do the work for your business. When you employ full-time staff, added expenses come along with it such as social security expenses, benefits, bonuses, and minimum wage increases.
As a business owner, looking into freelancers or those who get hired on a project basis could prove to save you a lot of money down the road. With advances in technology, you can outsource the majority of your work. You should also look into making sure that the employees you do have need to work a full 40 hour week, otherwise you could be paying them to sit idle.
Office Space and Furniture
One of the most costly expenditures that you’re going to have, next to your employees, is the amount you pay for office space. Commercial retail costs have been on the rise for the past decade, and businesses are spending unnecessary amounts of money on renting an area that is more than they can afford, or more than what’s needed. Ensure that the space you’re renting is suitable for your small business. You can upsize at a later time once you’ve started to make a profit.
Furniture is another costly expenditure for entrepreneurs such as you. Consider looking into your local classifies, or browsing websites such as www.craigslist.com. Many companies have excess office furniture that they are looking to donate or sell at a discounted price because they’re downsizing. Unless you’re running a small business that requires luxury furniture, you can find ways to save on what’s used to fill your office.
Don’t Focus on Image
When you’re in the earlier stages of your small business, you could quickly get caught up in the image of your brand and everything that comes with it. Reports suggest that entrepreneurs have spent thousands of additional dollars’ worth of logo designing, stationary, and bits and pieces that don’t do much but make your business look good.
Ultimately, your branding is going to change as you grow as a business, and you’re likely to have your logo change too. It’s best to save a professional logo design, website, and other marketing accessories for when you get established. When you focus on the backbone and structure of your business, you are going to free up time and money to be spent on the appearance down the road.
Managing your expenses is essential all times of the year, but when you’re just starting out; they can easily get ahead of you if you aren’t paying close enough attention. Without realizing it, you could be paying more, and purchasing more inventories if you aren’t keeping track of your receipts. There are many tracking apps out there that can help you keep up with your invoices, revenues, and expenditures. With all of that technology, it’s almost unacceptable not to know where your money is going.
When you know where your money is at, you’re able to identify any instances of overspending. Pulling reports multiple times during your fiscal year can help you determine any discrepancies sooner. Saving money could help you bring your business to the next level.
Incorrect or Improper Advertising
In the business world, advertising can be one of the most expensive things that you’re going to pay for. You’re putting your company at risk when you’re spending insane amounts of money on advertising that is going to saturate the market with your brand. When it comes to marketing and advertising, “more is better” isn’t always the case.
Take the time to understand your target demographic. That could keep you from making the vast mistake of expending too much time, and money, into marketing for the wrong audience. Ensure that you aren’t committing to anything for the long term and that you’re able to get out of contracts without penalties should you decide that the marketing isn’t working for you.
There are endless ways in which costs can get cut when you’re a business owner that’s just starting out, but the above five seem to be the most common ways that entrepreneurs spend (or waste) their money. It won’t hurt your business to be a bit more frugal when you’re starting out. Build up a reputation for your company, allow profit and your bottom line to increase, and understand who your brand is before spending money on necessities that you don’t need to be successful.
What ways do you suggest cutting back on costs? What other things have cost you more money than needed when you first started your business? Start a discussion below.