Are you Throwing Money out the Window?
Business owners often ask me about common practices to save money. It isn’t always about money actually paid out, because some soft costs also add up in ways you might not think. Some mistakes cost business owners more of their hard-earned dollars than they should, so here are six ways to save money in your business that you may not have considered.
- Discounting Too Much
You want to stay competitive and not miss out on a sale by being undercut in price. However, many businesses discount too much to get the deal, impacting their bottom line. Not forgetting to factor in overhead costs before offering a discount is significant. Also, evaluate why you are discounting the price. There are valid reasons to discount – to make room for new inventory or if you have discontinued products to move. However, if you are reducing the price to get a sale, keep in mind those customers are price shopping and not likely to become a repeat customer unless your prices are always the lowest.
- Trusting People Who Are Not Qualified
You hire Uncle Bob, a former advertising executive, to handle your books because you trust him not to steal from you. The good news is that Uncle Bob is not stealing cash. The bad news is that Uncle Bob is costing you money as finances are not his area of expertise. Whether it is not managing your cash flow or expenses, your CPA charging you more to do your taxes because your financials are not in order, or having to pay a bookkeeper a chunk of change to get your books in order, it is less expensive to start off on the right foot by utilizing a professional for areas such as financials, human resources, and marketing. Sometimes you have to spend money to save money.
- Value Your Time
As business owners, we wear many hats and need to think about the bottom line. We must pick and choose the best use of our time. However, there are times when it is more cost-effective to hire a professional for specific tasks. A good example is IT. Maybe you are techy and can set up a new computer yourself. However, ask yourself how long it will take you. The updates may take five hours to ensure all the programs are downloaded, and your email and printers are set up.
In comparison, an IT professional could likely have it set up (correctly!) in under two hours and charge $300. So, divide the cost (in this case, $300) by the time it takes you to do it yourself (five hours) to determine your hourly price ($300 ÷ 5 = $60/hour). What is your time worth? Again, as counter intuitive as it may seem, you may have to spend to save money.
- Set Goals and Reevaluate Regularly
Not only is goal setting critical, but evaluating your progress regularly is essential. Whether you update your goals monthly or quarterly, you will find greater success when goals are a part of your business practice. It is also a great practice to get input and the buy-in of your employees, as they are helping you achieve those goals.
- Treat Employees like Assets
Yes, you are the business owner. However, you can’t do it alone. If you have employees, it means it takes more than one person for your business to run. You have a team of individuals helping you and your business flourish. Treating employees like assets will make them feel valued, and go far in helping you to retain those great employees, which will save money on recruitment costs. Your customers will notice this as well, as valued employees are better employees. People want to support businesses that are supportive of their employees and customers.
- Obtain Feedback from Customers
You think you have a great product or service. However, have you asked your customers what they think? Customers offer a wealth of information – from likes and dislikes, to what your competitors are offering, and voids in your industry that you may be able to fill. At the end of the day, knowing what customers value is the most important thing to keep revenue growing.
Contact Flourish Today
There is much more to growing a business than meets the eye, especially if you want to build your company on a solid foundation. Having the right team can save money, time, and save you headaches! So, why not grow your business with a Flourish?
As a business consultant, I’ve spent years helping business owners grow their businesses with a flexible, personable, non-judgmental approach.