6 Useless But All-Too-Common Expenses That Turn Your Business Into a Money Pit

It takes a lot of money to keep a small business going – especially if you’re trying to make that business grow. When money is so important, every single cent needs to be spent wisely.

Many small businesses wind up spending a lot more money than they actually need to spend. Those funds would be better off allocated for growth or expansion. Cut the fluff out of your budget and use your newfound cash to help you build a brighter future.

Unnecessary Office Supplies

You’re always going to need office supplies, but changing the way you do things can reduce the amount you’ll spend. Going paperless is one of the easiest ways to save money. Keeping things digital allows you to save on paper, recycling, toner, and printing supplies. Many small businesses burn through mountains of these materials, and paperless businesses barely use them. Going paperless also makes your business eco-friendly, and that’s never a bad thing.

Leasing a Huge Building

You need to give yourself some room to grow for the next year or two, but not for the next decade. While it is a wise move to opt for an office space or retail space that will give everyone some room to move, it’s not a wise idea to overspend on something that you’ll never completely use. It may be wiser to choose a shorter lease on something slightly smaller. If you have your heart set on that huge building, try to negotiate the lease. You might be able to get it for a little less.

High Health Insurance Costs

You need your employees to be healthy, and offering decent insurance is a surefire way to attract top talent. There’s something else you can do that would benefit both your business and your employees. Start a wellness program. A wellness program is much less expensive than high insurance costs, and people who prioritize their wellness are a little less likely to need to use their insurance. Offer up some healthy snacks and partner up with a local gym for a discounted membership. Encourage your employees to use their sick days to discourage them from spreading germs around the office.

Advertising to the Whole World

Small businesses want to acquire as many customers as possible. They take to the internet to spread their message far and wide in an attempt to be heard by the right people. The problem with that overzealous approach is that casting a wide net is expensive. In addition to its hefty cost, it’s more of a gamble when it comes to locating an ideal customer.

Focusing on highly targeted ads will help you obtain customers and spread your message with little effort. If you don’t sell your products online, limit your advertising to people who live within a tight radius of your physical location. If you do sell online within your country, only advertise to people who fit your demographic within that country. It’s the most efficient way to spend your ad dollars. When you expand your business, you can begin to expand your reach.

Having Too Many Employees

It takes a lot to run a small business, and this means you’ll need people to make things run smoothly. Hiring people whom you can barely afford to pay may hinder you more than help you. It might be worthwhile to spend a little more on a rock star employee who is content to wear many hats, rather than paying several people the minimum to deliver an average amount of effort. Quality is more important than quantity when it comes to small business employees.

You can also reduce workload by automating as many processes as possible. The right tools can help you achieve a whole day’s work in just a few hours. Don’t do anything manually unless it absolutely requires live human involvement.

Failing to Follow Rules and Regulations

Making legal mistakes is one of the most expensive situations a small business can wind up in. Small businesses try their best, but sometimes fail to secure the right permits or licenses they need to operate or expand the way they’ve planned. Running a business is a learning experience, but you can’t afford to learn with your money.

It might be worthwhile to retain a lawyer for your small business. You need someone to look over the money, the rules, and the licenses as you grow and change. A lawyer might seem expensive now, but nothing is more expensive than finding yourself on the wrong side of the law.

Many small businesses work with tight budgets, but sometimes those budgets are tighter than they need to be. Keep a close eye on the books to be sure you’re not tossing away the funding for your success.

Guest Post: About the Author

Alana Downer is an avid finance blogger from Sydney, Australia, currently writing on behalf of Learn to Trade– money and finance experts. Interested in all things connected to growing a stable income, Alana might often be found online, sharing her financial tips and participating in discussions. Feel free to reach out to her on @alanadownerLTT.

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