With so many services available to help assist with every aspect of starting and running a business, it is easy to become overwhelmed by the choices and potentially waste money on unnecessary, extravagant, or low-performing products. When getting a new business off the ground, look out for some common money-wasters:
To keep overhead as low as possible, it helps to find a space that is ideally suited to your needs. A small, cramped space will create an uncomfortable and unproductive environment that is quickly outgrown, but too big of a space will waste copious amounts on overhead. More often than choosing too small an office, businesses choose too large a space that comes with high costs in rent, utilities, parking, and insurance. If your business requires a leased office, store, warehouse, or workspace, scout neighborhoods carefully to choose the best (and not already saturated) area with appropriate parking and foot traffic accessibility (if applicable) to your needs—overspending on pricey or luxurious spaces that far exceed your business needs will put an unnecessary strain on your budget and eventually force you to move or close.
Just as consumers are frequently advised to “shop around,” small business owners should heed the same advice. Getting too quickly in a lengthy contract or agreement with vendors can lead to overpaying for products that could be found elsewhere more affordably and may restrict your ability to negotiate new arrangements. Your customers comparison shop—you should too.
Bank fees, payment processing fees, late charges, and unused subscriptions drain your cash and give you little in return. Reconciling your bank accounts and credit card statements on a regular basis will greatly reduce the amount of money you are wasting in fees for late payments, bank charges, and monthly services you really don’t use or need.
1. Set aside time each month to carefully examine your bank statements and track down the reason and purpose of each fee or deduction from your account.
2. Review your credit card statements to spot subscription fees for services you don’t recognize, don’t use, or thought you canceled.
3. When possible, look for payment options that don’t incur fees.
4. Adopt software that keeps your bills paid on time, reminds you of due dates, and can convert bills directly into checks for on-demand payment.
Software for your business’s administrative and financial management is a great addition—but only if it is the right software with the features you actually need. Paying for high-feature products may not be necessary if you only need a few of the options. Conversely, small business owners should avoid investing in a bunch of different products until they have exhausted the features of what they have. Too often, software goes underutilized and multiple products are purchased that overlap in their offerings. A good defense against this is:
1. Research ahead of time the best tool for your specific industry type and company size.
2. Take the time to train on the product so that you know what features are included, even if you don’t yet need them all.
3. Add products that integrate with what you have to reduce manual entry, which wastes time and increases errors.
Your employees are an invaluable resource, and optimally utilizing their talents and their time is to everyone’s benefit. Employee turnover is high right now, with a lot of workers experiencing discontent with their positions due to feeling overworked, underappreciated, underpaid, frustrated by lack of advancement opportunities, stifled in a toxic workplace culture, and just generally burned out. Some ideas to help the staff management run more smoothly:
1. Adopt automating tools to complete recurring administrative and bookkeeping tasks so that employees’ time can be devoted to more satisfying and creative aspects of their jobs.
2. Outsource when appropriate so that complex or overly time-consuming tasks do not become the burden of one or two people. Virtual assistants and virtual bookkeepers can help manage routine office work and alleviate some of the burdens.
3. Adopt automated payroll software to assist with the HR management and get paychecks in hands promptly and accurately.
There are still many other potential ways to waste money. Crafting a comprehensive business plan and reasonable budget right from the beginning—and then adhering to them—is the best way to safeguard against cash flow issues and the temptations of overspending. Selecting high-quality, easily-integrated cloud software that can assist with administrative and bookkeeping tasks help daily office administration and financial management run more smoothly and affordably.