In this economy, every business is cutting costs wherever they can in an effort to make ends meet and increase profits. Small businesses, in particular, have to work even harder to avoid wasteful spending because they have fewer resources than big corporations.
Here is a list of some of the ways that small businesses may be wasting money:
1. Not making energy efficient choices:
The most common way small businesses lose money is through using appliances and fixtures that are not energy efficient. For example, switching to fluorescent light bulbs could save up to £10 per kilowatt hour and turning off desktop computers in the evening could save £20 per computer per annum.
2. Unnecessary food costs:
Constant lunching and trips to the local coffee shop could have an impact on your budget, especially if you have a tendancy to treat the rest of the office.
3. Not chasing debts:
Many small businesses don’t have their own accounts department to chase unpaid debts and keep track of their own due dates. This can cause an impact on cashflow and potentially result in unnecessary bank fees.
4. Unwise Advertising & Marketing Decisions:
Online advertising can be one of the fastest ways of reaching a large audience of prospects. However, using some online advertising methods, such as pay per click adverts, can be a costly waste of money if used improperly.
When deciding on your advertising methods, it is important to remember to take account of the return on investment to make sure it is worth the money spent and is bringing in enough sales.
5. Losing track of the small costs:
20p or 50p here and there may seem insignificant, but they can add up in the long run. For a small business, it is crucial to stay on top of where the money is going and the everyday expenses that can cause problems with your cashflow. For example, if you overpay on each envelope by 10p and send approximately 30 letters a week, this would add up to an annual loss of £156. In this scenario, it may be more sensible to purchase a franking machine to make sure there are no inaccuracies.
6. Settling for the price tag:
It is a misconception that discounts are only for big companies who buy in bulk. Many companies offer surprising discounts for small businesses in exchange for repeat business. You may also be able to negotiate additional discounts for paying your bills promptly. If you want help liasing with your suppliers to see what you can save today, the Procurement Group can help you.