For a small business, every penny counts. And if you’re spending too much money on things that you don’t give you the ROI you expect, then you might be harming your cash flow and hemorrhaging cash that can otherwise be invested into more important aspects.
No business owner wants to waste their hard-earned money. So if you want to optimize your cash flow and put your cash into the best possible places, here are the things that you need to stop throwing it at:
1. Bad accountants
For any business, accounting is a vital part of operations. It’s what keeps the business running smoothly and helps it to expand in strategic ways. So if you keep hiring bad accountants, how can you be sure that what you see in your numbers is actually accurate?
If you start to notice that your accountant is not delivering, invest in a better, more experienced accountant to manage your finances. While you’re at it, hire a small business tax consultant as well to keep your taxes in check and make tax season a breeze.
2. Extra employees
Not having enough people on your workforce is bad for business. It can lead to employee burnout, poor productivity, and a high turnover rate, among other negative effects. However, having too many employees is no good, either. If there are too many people and not enough tasks to go around, then you’re basically paying for seat warmers who are also more likely to become demotivated because they are idle.
Only hire additional employees if the workload requires it and the extra work is not just seasonal. If you need more hands on deck but the work is not enough to require a new hire, outsource to freelancers or temporary employees who can take on the additional workload without joining your company as full-time employees.
3. Office space
Having an office that’s too big is one of the worst things you can spend your money on as a small business owner. Sure, some clients might be impressed by the sheer size of your workplace, and your employees might love that they’re not cramped next to each other, but paying for extra space that you don’t use is wasteful and stupid.
Furthermore, modern technology allows companies to let a portion or the entirety of their workforce to work from home. If this set-up is feasible for your business, consider letting your employees work remotely and lease a smaller office space to save money.
4. Non-measurable and non-targeted marketing
A marketing campaign should be targeted and measurable if you want it to give you an ROI. If you keep on paying for marketing that does not achieve both, then you’re most definitely not getting the bang for your buck. If anything, doing these types of marketing campaigns can bring confusion to your team and derail your future marketing strategies.
5. E-mail lists
Don’t buy e-mail lists from individuals or companies that claim it will reap more leads for your business. Buying these lists is like getting robbed in broad daylight, except that you’re handing over your money willingly but for no results at all.
6. Unnecessary technology
Keeping up with the latest tech is necessary to stay on top of your competitors. However, overspending on technology does not guarantee that it will deliver sufficient ROI. Apart from the technology itself, you might also have to invest in training, server administrators, and additional personnel to manage all of your new tech, which can all contribute to its price tag.
Avoid buying new technology without doing your research first. Before you buy a new piece of tech, you must assess its ability to give you a good ROI, not just its inherent benefits to your business. Moreover, it is necessary to determine the additional costs of buying new tech, such as the ones mentioned above.
7. Traditional ads
Brochures, radio ads, and newspaper ads: these advertising modes were effective then, but now? Not so much. People rarely look at print ads anymore, and if they do look, it’s seldom your target market. For radio ads and TV ads, people change the station to avoid listening or watching an ad.
If you’re still pouring a significant amount of your investment into traditional ads, then it’s time to divert that money into something more effective, like digital ads.
It can be easy to waste money on things you think will bring you great ROI, and most new business owners make this mistake. If you’ve realized that you’re in the same boat, it’s not too late to pull your cash streams from these unnecessary expenses and pour them into things that will work for your business.