Published By Janet Gershen-Siegel at June 4th, 2021
Is it really free money? It may not be as glamorous as winning the lottery or venture capital money. It’s not as sexy as your content going viral. And it’s not as exciting as getting a shout out from major market influencers like Oprah Winfrey and Elon Musk.
But it is often easy, and it is certainly anything that any company can do. It’s the free money you can get from cutting waste.
Is your business wasting money? It probably is, in some way or another. Cutting waste should always be on your radar.
Save a dollar and you won’t need to:
When tightening your company’s belt, look at the expenses going out first. There are several kinds of expenses any business can and should cut. Be creative when looking to cut expenses. Here are some kinds of expenses that you might not have thought of.
Employee salaries are the largest expense for many organizations. But did you know that there’s free money lurking in there?
But let’s make one thing perfectly clear. Don’t ask your employees to take a pay cut. Please, never do this! You’ll kill morale. But you should work to tap your employees’ full potential. Hence, pay attention to training.
Employees with more training may not be using that training. So, why aren’t they? Ask employees about their background and interests. There’s a chance that they could do more for you and get more motivated about working with your company in the long run. See inc.com/peter-cohan/first-90-days-13-totally-useless-expenses-your-company-is-wasting-money-on.html.
Outsourcing is expensive! Some small businesses pay thousands of dollars to outsource projects. But your company may be able to save a considerable amount of cash, by taking some or all of those projects in-house.
Give your outsourced work to part- or full-time employees. After all, outsourcing work can make it hard to communicate clearly what you want done. This results in costly errors and delays. It is worth analyzing whether hiring a dedicated worker could pay for him or herself within a year.
Hiring the wrong person can be a very expensive proposition. Still, you need someone to do the work, and you don’t have forever to decide on who to hire. So make your job postings clear and only hire people experienced in what you need for them to do.
How can you hire better? Hire employees on a trial basis. This may be through working with a freelancing site like UpWork, or it may mean using a temp agency. In either of these scenarios if you must fail, at least you fail fast.
Let the poor performers go. People who aren’t doing well tend to be unhappy anyway. You may be giving them the nudge they need to get something else. And make sure that all the workers staying on your payroll who do contribute are doing far more than the minimum required. If you can’t motivate your C players to act more like the superstars, cutting them from the payroll will give you the money you need to hire more A players.
Software and tools can account for a huge proportion of a company’s expenses. But far too many businesses either buy tools they don’t need or buy tools that are bloated with features they don’t use. This can be software but also, literally, tools.
The truth is the so-called best tool on the market is often designed with large enterprises in mind. This means that when you’re small, it’s likely overkill. So it’s often better to purchase something that’s better suited to a business of your size. It may be a little less sexy, but it will save you a fair amount of money while still being equally as effective. See embroker.com/blog/business-expenses-startups-waste.
Do you really need all that office space? Can employees share desks and work from home some of the time? Can some employees work from home all of the time? WFH also opens up hiring to other parts of the globe, where potential hires might be okay with less money.
Okay, so maybe you do need office space. But does it have to be in the most expensive part of town? Pay attention to the end date of your lease and start looking for cheaper digs before you’re under the gun.
And if you find less expensive office space elsewhere, tell your current landlord when it’s time to renew. If your business has been a good tenant, they might work to keep you.
Do you cater all your meetings? Do you really have to? If you must offer refreshments, why not handle some of them in-house? This doesn’t mean your employees start cooking. But it can mean a better coffee maker or better coffee to brew in it.
Do you have to pay utilities? Can you choose your own appliances? An energy efficient refrigerator will make a difference. So will using energy efficient fluorescent lighting. And just like in your house, turn off the lights when leaving a room.
Do you use a postage meter? It might not seem like a lot, but paying the exact amount for postage, rather than 5 cents more every time, will add up in the long run.
We all know about meetings that should have been emails. But they’re not so bad if your meeting is held remotely or just down the hall. Do you really have to be in the southern office? Particularly in the age of Covid-19, less travel is safer anyway.
Does your business have a documented expense policy? Or can anyone claim pretty much anything at any time? Traveling employees might help themselves to the minibar or rent movies from the front desk, but your business doesn’t have to pay for such things.
Marketing can be trying new ideas to see if they work. That’s okay. But if you already know, then you should stop experimenting so much!
Like the best goals, your marketing and advertising have got to be measurable. Measuring helps you realize a lot more quickly if a campaign is working, or not. See nav.com/blog/4-money-leaks-that-could-be-hurting-your-bottom-line-658859.
When you go grocery shopping, there are always small things at the checkout. They’re often inexpensive. So people buy them on impulse, even if they weren’t on the shopping list. But those packs of gum can add up over time.
In the same way, your little expenses here and there can add up. They can really get away from you if you just open up a petty cash drawer to buy them. So keep track of these expenses and review them every month or so. Determine if they’re working for you.
How long are your meetings? Are they all necessary? Really? A chat program like Slack might make some of those meetings unnecessary, or at least shorter.
Commuting can also be exceptionally time-consuming. It can also be tiring, making it harder for employees to get going in the morning. Can some or even all of your employees work from home at least one day per week? This is also a way to enhance employee morale.
Consider informally monitoring the weather and telling your employees to work from home when commuting conditions will be truly awful. These are serious snowfalls or blizzards, or heavy rain from the remnants of hurricanes, not brief showers. Not only are commutes longer and more dangerous, but employees are also more likely to be late.
A solid accountant will help prevent costly errors. They will also be able to calculate and pay your business taxes correctly the first time. If you, the owner, are still preparing these documents, it’s probably not a good use of your time. If you currently can’t afford an accountant, at least get good professional accounting software.
If you’re just getting a one-page bill from an outside counsel law firm, or other expensive service your business must have, ask for it to be itemized. Sometimes there are billing errors and this can be the only time they’re caught.
Is your business wasting money? Stop the bleeding and hire more carefully. Look into your expenses more closely. Measure your advertising to see if it’s working. Keep an eye on ways to save time. A professional accountant is worth the expense. Audit the larger bills your business has to pay, and request itemization, to be sure you’re only being charged for what you actually owe.