Getting your small business off the ground can be a difficult task, and keeping it afloat and profitable can seem impossible at times, but sticking to a budget is half the battle. Even the most budget-conscious businesses can still feel like their money doesn't stretch nearly far enough, though.
That’s because businesses leak money all the time without even knowing it.
Wondering where that money goes? Check out our list below for five places small businesses are leaking money and how to change that.
Advertising
You want people to know about your business, so you call up the local newspaper and place an ad – but wait, are you customers even reading the newspaper? Or maybe you want to try a Facebook or LinkedIn ad – how do you know your customers are there? Small businesses cannot afford to waste money advertising in places their customers are not engaged.
When deciding whether and where to spend money on advertising, think about your target customers and what publications they’re reading or social media networks they’re on and make wise choices about where your advertising budget is going.
You also want to be sure you’re getting a return on investment (ROI) on your advertising spend, so track your campaigns and the results and adjust your budget accordingly. Not sure how much you should be spending on advertising? Check out this Entrepreneur article to help you calculate your budget.
Energy
When we get to our offices or businesses each morning, we turn on the lights, the coffee maker, our computers, the printer, etc., without a thought on how these systems are affecting the energy bill. But wasted energy from systems not in use is a significant portion of your business’ energy bill. With this in mind, turn off systems when you’re not using them, switch to energy efficient light bulbs, unplug chargers when you’re not charging and choose efficient appliances to lower your energy waste and energy spending.
Office Space
Sure it’s great to have a beautiful office or storefront to call home, but if most of your business is done by phone or online, you might be wasting a significant portion of your revenue on your business space. Consider whether you need a brick and mortar location or whether you can operate remotely. If you have occasional client meetings and want a nice meeting space, consider renting an executive suite.
Events
Just as with advertising, you want to get your business in front of serious customers, so trade shows may seem like a great way to do this. But keep in mind trade shows are a busy place and booths, marketing collateral, sponsorship and booth staff can quickly add up and your ROI could be minimal if you’re at the wrong show or the show floor is overly crowded. Do your research and only attend the events that will have the maximum benefit for your company. Or consider skipping a trade show booth and apply for a speaking slot or simply attend the conference and network with others on the show floor.
Websites
In a world where we’re all connected to our smartphones, tablets and laptops 24/7. It’s important to have a website that gives customers and potential customers the information they’re looking for and the tools they need to succeed in their research or purchase. But where do you go to create a great website?
Small businesses might not be aware of the typical costs of a website or whether or not to have a flashy display. To ensure you’re getting the right website for your budget and your customers, ask similar businesses for website designer recommendations and do you research on the average costs of website design. Or, hire a designer in-house to build the site for you, and then utilize this employee to design other marketing and advertising collateral as needed.
Consider the five areas listed above that your business might be wasting money and see how you can tighten your budget and operating costs.
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