4 biggest money wasters that hurt your business
In an ideal world, every dollar that goes into a business helps with the business’s long-term profitability. However, real life isn’t perfect and businesses can’t be productive 100 percent of the time. Fortunately, you can still help your bottom line by reducing or eliminating some of the biggest and most common money wasters that face businesses today. Here are four common money wasters and what you can do about them.
1. Having too much office space.
It can be difficult to gauge how much office space your business needs, particularly when it’s still young. It may seem logical to lease more space than needed so your business can "grow into it." But markets change and growth predictions can be miscalculated, possibly leaving your extra space empty for months or years, draining your finances in the process. This can siphon away cash that could otherwise be used to help grow your business. Consider making do with an office space that better suits your business’s current size or having employees work from home.
2. Making bad hires.
When an employee turns out to be a poor hiring choice, he or she isn’t just detrimental to your business as an employee, but also as a former employee. That’s because finding and training a replacement can be costly. According to a case study analysis from the Center for American Progress, the median cost of employee turnover was approximately 20 percent of an employee’s annual salary. Avoid the high cost of employee turnover by taking the time to find the right employee from the start and quickly firing someone who isn’t working out. This may mean firing him or her while still under probation, which most employers set as the first 90 days of work.
3. Scheduling too many meetings.
Meetings are important tools for conveying information and gathering feedback. But as useful as they can be, meetings always seem to go over time and take up significant portions of our workdays. In fact, according to a Robert Half Management Resources survey, professionals on average believe that 25 percent of time spent in meetings is wasted. You can reduce unproductive meeting time by having an agenda for every meeting, scheduling shorter meetings and eliminating some meetings in favor of email updates.
4. Spending on ineffective or inefficient marketing.
Are you measuring the success of your overall marketing strategy? Take the time to evaluate the success of each new marketing campaign, analyzing if it’s delivering a positive return on investment (ROI). If your marketing campaigns are performing poorly, here are a few guidelines to consider implementing:
- Create a unique, specific goal for each campaign.
- Avoid spending money on strategies that don’t include a way to measure success.
- Only invest in strategies with sufficient research that suggests they will succeed.
- Steer clear of risky, unproven platforms, technologies and strategies.
Saving money starts at the top
The big takeaway from all of this? Ultimately the biggest money wasters that hurt your business can be prevented with changes from upper management. Fortunately, that means it’s in your power to help your business save significantly on spending. You can find more ways to save your business money by visiting California Bank & Trust’s Business Resource Center.