When you’re running a business, especially a small business or a startup, you need to save as much money as you can. You can’t afford to be spending money on unnecessary magazine subscriptions for your business, overpriced delivery services, or any superfluous extras that don’t help your business bring in more revenue. Although in many cases, you have to spend money to earn money, sometimes you end up spending money with no return. You might even be surprised at how much money you’re losing through everyday operations.
For example, if you require that your employees wear uniforms, you could be overpaying for your purchases. If you use the wrong designer or program, you could be paying not only for the shirts but also for the design itself. Instead, you could save hundreds of dollars by using a free design template or another free program. There are a number of other ways that your business could be losing money, and these are some of the main areas in which you could be spending unnecessarily:
Working at 100 percent capacity without any breaks throughout the day will cause anyone to burn out quickly. Luckily there are short breaks and meal breaks installed throughout the work day to help everyone make it through. Even between those scheduled breaks, people often find time to take short breaks by talking with each other, quickly checking their phones, or standing up and walking around the room to combat sitting all day.
Although you may not mind employees taking a break from time to time or taking a quick mental break yourself, it can become far too easy to get lost down a social media black hole or lose track of time which can result in a lot of money wasted. According to a survey, employees will spend up to 56 minutes per day on their phones doing things other than working.
Finding the right vendor can be tricky. Not only do you need to ensure they can provide what you need, but that you can arrive at an agreement that both of you are happy with. If you’ve found a vendor you think will be a good fit, you may want to look a little deeper—or reevaluate your current vendor relationships. Many vendors will include service fees in their prices that other vendors may not, which could mean that you’re overspending on something you don’t have to be.
PayPal is a great example of a vendor whose fees can affect your business. If you use PayPal to send and receive payments for services, you could be subject to a 3.7 percent transaction fee as well as a fixed fee on top of that. That means that when you receive a payment for your services, the amount you receive will be less than what you invoiced since PayPal will take the fees stated.
Employees will come and go. Whether they find an opportunity they feel will be a better fit for them, have a major life change that requires a move, or aren’t able to perform duties as necessary and require hiring a replacement, turnover is natural. That turnover costs you, though, and too much turnover could be causing you to lose a lot of money. It’s estimated that replacing an employee who makes $10 an hour could cost more than $3,000, and replacing a salaried employee who makes $40,000 a year could cost between six and nine months of their salary.
Unless you hire only remote employees, you’ll need to pay for office space. Even if you work remotely, you may want a shared office space or executive suite to work out of. While you don’t need to work out of a run-down, unsuitable office, it’s easy to overspend on office space and end up paying for things you don’t use. In addition to that, if you are responsible for all or some of the utilities and the office is not well-insulated, you could be overpaying for both the office and the utilities.
Although running a business requires that you spend money, you could be overspending in a number of places you might not expect. From the cost of keeping up your office space to the amount of time that employees waste or the high cost of employee turnover, you could be losing money in a lot of areas of your business.
What are some ways you plan to cut back and save in your business? Share your strategies in the comments.