I don’t need to tell you that if you’re running a business, you need to manage your money properly. If you’re reckless with your spending, you’ll burn through all of your cash in a couple of months and the business will collapse. That’s why it’s so important that you’re always keeping track of the money that you spend and you’re finding ways to cut costs where you can. That means only hiring the employees that you can actually afford to pay, being reasonable about the office that you can afford to rent, and finding new ways to increase productivity throughout the company. But those aren’t the only ways that you can waste money.
A lot of the time, businesses are wasting massive amounts of money without even realizing. It’s that hidden wastage that is really putting your business in jeopardy because, even if you think that you’re being responsible with your spending, your overheads are going to be way too high. These are just some of the ways that you might be wasting money without even knowing it.
Unnecessary Emails
Emails are a great business tool because communication is so important, but we all know those people that send emails about every tiny little thing, and that could be costing you money. Most people working in an office spend an average of 13 percent of their time at work answering emails. For some people, that number is going to be quite a bit higher. The emails themselves aren’t costing you any money but if your employees are wasting time answering hundreds of emails about trivial things, that causes a massive drop in productivity and that is costing you money.
Trying to manage that is hard but you need to implement some kind of policy for emails to stop people from sending unnecessary ones. Let your employees know that they should only be sending an email if it’s about something important and relevant to their job. If something isn’t immediately important and they could just wait until they see that employee later in the day, they shouldn’t be sending an email about it. If you’re not sure whether you’ve got a problem with unnecessary emails or not, ask your employees about it during your next review and see how much of their time they spend on emails.
Paying Too Much Tax
Every business needs to pay tax, it’s just one of your unavoidable expenses, but are you paying too much? The structure of your company and the way that you file your taxes has a big impact on how much you pay. You also need to make sure that you’re claiming all of the deductions that you’re eligible for so you’re paying the minimum amount possible. Most small businesses register themselves as a limited liability company because it protects their personal assets if the business goes under. If you file your taxes as a limited liability company, you can’t deduct your business expenses so you’ll be paying a lot more. But it is possible to be taxed as an s corp and still keep the protected status of a limited liability company. This is usually the best choice for most small businesses because you can reduce your tax bill by quite a bit by deducting all of your business expenses.
Outdated Technology
If your business isn’t making good use of technology, you’re going to have a big problem with productivity. Technology is one of the best ways to improve productivity around your business, but only if you’re managing it properly. If you aren’t updating your tech regularly, you’re probably wasting a lot of money. First off, older technology is more prone to breaking so, even though you think that you’re saving money by working with what you’ve got instead of updating it, you aren’t. You’ll be paying IT technicians to come in and fix it all of the time and that’s going to cost you a lot more money in the long term. You also need to consider the impact that it has on productivity because every time a computer breaks or a piece of software goes down, your employees can’t do anything and that’s going to add up to a lot of lost revenue.
You also need to think about the possibility of cyber-attacks. It’s a big problem for all businesses and if you fall prey to online criminals, it can be very expensive. You might be the victim of fraud or you could lose a lot of customers if their credit card information is stolen. If you’re not regularly updating your security software, you’re just making it easier for people to crack your security systems. Even though it costs quite a bit of money to replace all of the computers and keep buying new software, it will actually cost you a lot less money over time, so it’s worth doing.
Obsolete Employees
If you have been updating technology regularly, some of your employees may have been rendered obsolete. Automation is one of the major benefits of business technology because it handles a lot of the menial tasks that fill your employee’s days and frees up more of their time to work on other things. In some cases, that means that your staff become more productive, but in other cases, it means that their job disappears completely. Usually, this happens over time and they find that they have less and less to do until eventually, there isn’t really any reason for them to be there at all. Because it’s a gradual process you might not always realize this and they’re not likely to tell you because they don’t want to lose their job. If you’re still paying these employees to sit around and not really do anything, that’s a huge waste of money.
You need to be on the lookout for these kinds of employees when you’re doing performance reviews so it’s important that you ask people to give a breakdown of their daily duties. In some cases, you might be able to combine a few different roles into one and then lose some employees which is going to save you a lot of money. Even if you don’t want to lose people, you can assign them more duties so they’re making more of a contribution to the business.
