You’ve likely heard about the most common ways people waste money in their small business, but there are plenty of other things you may be doing that cost you more than you realize. And as a result, your profits shrink without your knowledge or intention.
The idea of saving money may be a hard pill to swallow, but if you want your business to survive and thrive in the coming years, it’s time for some tough love. We all know that as businesses grow they can become more expensive to operate, which is why we need to make sure we’re taking steps now so our expenses don’t spiral out of control later on.
Did you miss the first part of this blog post? Check it out here.
Otherwise, here are 7 ways you could still be wasting money without even realizing it!
1. Stop overpaying for the wrong type of employees/contractors
Small businesses owners make the mistake of hiring friends and family out of a sense of loyalty instead of focusing on finding someone who can actually do the job. These types of hires may seem like great people and they might even be decent workers, but that doesn't mean that they're qualified to work in your business. If you're paying top dollar for unqualified (and unproductive) employees, you're wasting money!
So before you hire someone, make sure they have the necessary skills and training to do what you need them to do. And remember, don't fall into the trap of hiring because someone has a personal connection with you. Instead, hire because they're the right person for the job!
If you think about it – would you want your company associated with someone who isn't good at their job? So why would you hire them to do something for your business?
If an employee can't produce results, then they are costing your company money! So avoid making any hasty decisions that might cause more problems down the road. Be patient and find the right person who's qualified to do the job well!
2. Stop wasting money on tasks that can be automated or outsourced
This is one of my favorites – and easiest – ways to cut costs! From reviewing proposals, sending receipts for reimbursements, scheduling 1099 status updates, or processing online payments; there are dozens of manual processes that you can either completely outsource or automate with the right tools. And if you combine this suggestion with #1 above (hiring more qualified individuals), then there's no reason anyone within your organization should be doing anything manually… EVER!
3. Stop wasting money by not selling enough (or selling for too cheap)
This one is big – especially if you consider that 80% of small businesses fail within the first five years. So there are two main reasons why this happens: either new business owners have no idea how much to charge for their products or services OR they've never done any research into what the product/service is actually worth.
If you're struggling with pricing, don't be afraid to ask other business owners who are in similar industries how much they charge for their own products and services. Granted, there's always room for discounts, but never sell yourself short if you want to make a profit.
And please don't think that raising your prices is the only option. You can also provide more value with your services or products by simply offering your customers something for free.
And while I'm on the topic of value, it's important to remember that your customers are looking for solutions or results – NOT products or services. So stop selling features and start selling benefits instead! Yes, this might seem like another one of those “business buzzwords” but it's much more than that. Benefits are all about the outcome and what's in it for the customer. So focus on those instead of using confusing jargon to talk about your products and services!
4. Stop paying expensive, recurring fees for services your business doesn't really need
I'm talking about the “forgotten” subscriptions like web hosting, domain registration, or professional licenses that you've had lying around for years and are no longer using. Many people don't think to cancel these types of things because they forget about them – especially if they've been around for a long time! And let's face it – these providers WANT you to forget about them because they make lots of money from people who don't pay attention to their monthly charges.
So whether it's an old domain registration or your hosting provider charging you $10 per month for a service plan that you're not using anymore, make sure to review your current contracts and find out what you're paying for each month. And if it's not something that is keeping your business running – then cancel it!
5. Stop wasting money on home office expenses
Instagram and Pinterest FOMO is real and it might have you thinking that you need a Scandinavian minimalist aesthetic for your home office. But it's not about where you work from – it's about your business. And your business can be represented from anywhere – including Starbucks, a dedicated space in an office building or even working from the comfort of your bedroom. (Just please don't do that last one – or at least not more than once in a while!)
Seriously, if you're running a business from home and it's important for you to have an office within your house, then by all means get one. Just make sure that this area is dedicated to working only and the rest of the house.
If you're serious about growing your business but you're still allowing “home office FOMO” to dictate your home office “needs”, then it's time to stop buying into the hype. Remember, just because everyone else has an ergonomic chair or a standing desk doesn't mean you need one too! Because the truth is – Office Depot makes a lot of money selling furniture to small business owners who don't really need it. And that's why you should always do your research and make sure you're getting the best deal possible.
6. Stop wasting money on things that don't align with your business
If you don't have plans to start a podcast, don't run off to Amazon and get podcast equipment. If you're not a professional photographer, there's no need for the latest DSLR. And if you're not running a large-scale blog, there's no need for $200/mo WordPress hosting.
Instead, start saving for the things that really do matter to your business – like hiring talented people or expanding into new markets. And the sooner you stop buying unneeded equipment and subscribe to services you don't use, the sooner you'll have the capital you need to start growing your business.
It's easy to get caught up in all of the things that other people are doing with their businesses – especially when they seem to be having success from it. But remember, everyone is different and has different goals for their business. So before you try to copy someone else's ideas, make sure they're actually aligned with what you want for your business.
You need to learn how to become a master of saying "no" to the things that do not align with your business and “yes” to everything that does!
7. Stop wasting money duplicate books/courses/workshops
Just because it's available doesn't mean you need to buy it.
One of the best ways to save a ton of money in your small business is to stop wasting money by repeatedly purchasing things you don't need.
For example, I know a lot of business owners who say they need every book on their favorite topic (e.g. marketing books). But what those same people fail to realize is that most of those books share the same ideas and information – so instead of wasting money on individual books, buy one and take your time to read it – then apply what works for your business. Trust me, you'll save a lot of money this way.
The same thing goes for workshops and courses that are available online. Sure, I know investing in yourself is important and as a small business owner, you should never stop learning and growing as a business person. So take every opportunity that's available to you and learn as much as you can whenever possible.
You just don't need to break the bank just because everyone around you is.
Remember, we all start our businesses with a limited budget and we always want to make sure we get the most out of it and not end up wasting money on things they don't really need.
Just because the latest course is available doesn't mean it will get you closer to your goals. And if a course doesn't directly align with what you want for your business, then save your money and put it towards something that does.
I realize that this may come off as cannibalizing my own business, but I am a firm believer in only purchasing courses, books, workshops, and conferences as needed. That is if you're not ready to receive the information or your business isn't quite at that level yet to make great use of the information, then it's best to save your coins. Learn as you go, but know when it's time to level up.
Conclusion
In this article, I’ve covered 7 more ways you could be wasting money in your small business. But there are plenty of other ways if you know where to look! To make sure you optimize every cent and get the most out of your marketing dollars, ask yourself these questions to see if any areas can use some improvement. What have been the biggest wastes of money for you? Which question from the list do you need help with first? Let me know by commenting below!
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