Looking for ways to cut company expenses? There could be ways in which you’re wasting money that you hadn’t even realized. Here are just 9 common ways in which companies fritter away their hard-earned cash.
Hiring the wrong people
Employees are expensive to hire – and the wrong employee can be particularly expensive. It’s important that you hire people who are going to be productive and loyal. A bad employee could result in extra costs as you try to repair the damage they’ve done, whether this is upsetting clients, driving away fellow employees, making costly mistakes or deliberately sabotaging your business.
To make sure you hire the right people, you need to make sure that you’re not rushing the hiring process. Start by deciding exactly what role you’re looking for, take the time to write an ad, place this ad in as many places as you can and then read as many applications as you can manage. By taking your time, you’ll attract a bigger spread of applicants – this increases your chances of finding that perfect employee.
Make sure to conduct interviews with applicants and use carefully thought out questions to assess their skills. You can even try offering a trial period to get a better idea of how they act on the job.
You can pay a recruitment company to help with the hiring process, but you should be sure that they’re reputable and worth the money.
Marketing without a strategy
Effective marketing will bring you more customers. Unfortunately, many companies don’t market effectively – they may rely on generic marketing strategies without doing any real research into who their audience is and what they want. This could include posting flyers through random doors or turning up at a trade fair with no real goal.
You should make sure that you only use marketing strategies that are appropriate for your target market. A phonebook ad could be a waste of money unless older people make up a big percentage of your target market (some may not have access to the internet and may still rely on phonebooks). You should also think carefully about when you run your marketing campaign and for how long – there could be events that you could lead up to in order to maximize leads, just as you may want to boost social media posts at certain times.
Outsourcing a marketing company could be worthwhile for marketing tasks that you don’t feel you can do yourself such as SEO or video production. Meanwhile, you can DIY the tasks that you do feel comfortable with – this could include social media marketing or handing out flyers.
Buying social media followers/likes
In the last decade, social media has become a major marketing platform for businesses. However, it is also a popular source of wasted money.
The biggest culprit is buying followers and likes. This is shady business as you’re essentially buying fake influence. The worst of it is that it usually doesn’t work – followers and likes tend to come from dead accounts, many of which are deleted by social media sites for inactivity, resulting in lost likes and follows. It can also look odd if you’ve got lots of followers, but no real engagement – many people will suspect that something fishy is up.
Besides followers and likes don’t pay the bills. They may slightly improve your company’s reputation, but you’re much better off encouraging real leads on social media by creating engaging content.
Leaving machines on standby when not in use
A lot of companies are guilty of leaving machines plugged in or turned on when not in use. If you’ve got a room full of computers, this can be a lot of wasted energy that is likely to be increasing your energy bills.
Make it a habit of turning off and unplugging all machinery at the end of each day (aside from machinery that needs to be left on such as refrigerators). You may be able to encourage employees to do this.
Clinging onto old energy-guzzling tech
Certain old technology can seem worth clinging onto if it’s still working perfectly (if it ain’t broke, don’t fix it). However, whilst this technology may still be in working order, it could also be guzzling energy if it’s over a certain age. This could be resulting in high energy bills and so you may want to look into replacing this tech with newer machinery.
There may even be machines that can be replaced with software such as fax machines. Whilst you may still need to send faxes, there may be ways of doing this digitally as proven by this guide on how to send a fax online. You may even be able to sell some of this older tech.
Splashing out on gimmicky tech
Just as certain types of old tech can drain your money, so can unnecessary pieces of new tech. For instance, there may be absolutely no reason to buy a flashy industrial printer capable of printing 70 pages per minute, if you barely ever print 70 pages per week. Such machinery could cost more – and if it’s more complex, it could even require extra training to use.
Most of us get sucked into the belief that flashy and expensive equipment is better, but sometimes something mid-range or even low-range can have all the functions we need. Always consider your company’s needs and shop around for machinery that meets these needs.
Paying for unused software subscriptions
A lot of us have unused software sitting on our desktops, some of which could have a subscription fee. Canceling these subscriptions could save you a lot of money.
Certain software may be used infrequently, in which case you may want to look into cheaper alternatives. You may even be able to save money with multifunctional software that does the function of two or more programs at a fraction of the price. Always read reviews of software or download free trials before making the decision to purchase them.
Outsourcing too many tasks
Outsourcing can allow you to save time by delegating tasks to other companies. But whilst it can save you time, it could be wasting you money.
Commonly outsourced tasks include accounting, cleaning, marketing, and virtual reception work. You should think carefully about which tasks are truly worth outsourcing and which you can do yourself. There may be no use in outsourcing accounting if you only have a handful of clients that are easy to keep track of, but if you’ve got a complex payment system, you may feel that it saves you a lot of time and hassle.
You should also consider who you outsource too. You may not need to outsource a firm and may be able to simply use a freelancer. That said, you do want to ensure that they offer reliable service.
Having too many ‘business’ lunches
Paying for lunches, drinks and other non-essentials with your business funds could also be chipping away at your finances. Whilst the occasional lunch may be okay, you should avoid spending too much of your company’s earnings on trivial luxuries.
Try to set a budget and be realistic about which luxuries you need. If you’re meeting an important client for the first time, you may want to impress them by meeting in a fancy restaurant. But if the stales aren’t that high, there’s no reason why a skype call won’t suffice.