If you’re running a small business or any type of business for that matter, you are bound to bump into cash flow issues at some point in time. One study from a U.S. Bank found that lack of cash flow and understanding of how cash flow works is the main contributing factor to around 82% of business failures in this country. The issue is that many of these problems could be avoided if people refrained from committing common mistakes. Let’s take a look at some of the areas where small businesses overspend and lose money the most.
It’s still surprising how many businesses still see their energy consumption as an afterthought. Others may be aware that they might be able to save, but assume that the savings they would make are not worth the effort.
However, every small business should have a commercial energy audit done. If you want to know what these are and when you should consider getting one, visit lightingmaintenance.com.
In short, these are conducted to check how much your appliances are consuming energy and what could be one to reduce the spend. Most business owners and their accountants don’t have the expertise needed to do this, so don’t rely on guesswork and hearsay to make changes. Working with an expert will allow you to make the right changes quickly that will translate into immediate savings.
If you’re hellbent on staying old school or dubiously believe that you’re more productive that way, it’s simply because you’re too intimidated by modern tools and methodologies to understand their benefits. Archaic processes are difficult to scale and monitor. While your competitors will be able to closely monitor their processes and continuously improve them, you’ll be in the dark buried under a pile of paper.
Try to go as paperless as possible and use software for workflow management. Use systems that allow you to spot inefficiencies and see who should be held accountable. Use a CMS system to document interactions with clients. Even if you’re a small operation, there are processes that can be automated, so pay special attention to your everyday tasks and see where there could be space for improvement.
Hiring too Much too Fast
Another common mistake is hiring a bunch of people in the early stages. Some companies will decide to have an in-house marketing team, even if they only need someone to launch and monitor their campaigns. You don’t need to have an accountant full time to handle payroll or someone in charge of IT. These are all functions that could and should be outsourced if you don’t have the structure to support all of these employees.
Also, look at whether you could take in some interns. These can be a very valuable tool and starting with interns will give you an idea of how to delegate better.
These are all common areas where small businesses end up losing money or overspending. Make sure that you look at your operation and see how it could improve. It will all reflect on your bottom line at the end of the day.