How to Avoid Common Money Leaks in Your Small Business
Money leaks in your small business eat away at your profits without you knowing about it. Even if your business seems to be in excellent financial health, you should regularly check for leaks to ensure that you're not unwittingly wasting money. Plugging money leaks can help reduce your spending and thus boost your profit margins without too much extra work. Here are the most common money leaks to look out for and how to fix them.
1. Online Advertising
It's easy to let advertising fees get out of hand. Social media pay-per-click fees may seem small, but they add up and can present a significant money leak for your small business. So keep a close eye on any social media or Google advertising campaigns to ensure you're not running up a hefty bill. It's also important that you regularly review the effectiveness of these adverts. If they're not bringing in business, they're a wasted expense.
At some point, we've all signed up for a free trial with no intention to continue, then forgotten all about it and ended up paying. Other times, we stop using a service but fail to cancel the subscription. It's all too easy to let your business leak money this way, but it all adds up. Review your subscriptions regularly and promptly cancel any that are no longer benefiting you.
3. Power Usage
Small mistakes like leaving the lights on overnight and forgetting to switch off devices may seem like a small deal, but over time they can seriously eat into your profit margins. Getting into good energy-saving habits and encouraging your staff to do the same is important.
There are many other ways to reduce electricity usage, such as investing in insulated blinds or switching to energy-efficient lightbulbs. Although these changes present an upfront cost, they will save your business significant money in the long term.
4. Office Supplies
It's easy to go over the top with office supplies, so take some time to assess what is and isn't necessary. For example, thousands of multicoloured sticky notes are fun, but they're hardly an essential expense. Furthermore, many businesses waste a lot of money on printing, which is easily avoidable in the age of cloud-based software.
5. Credit Card Fees
Being lax with your credit card payments is a surefire way to create unnecessary costs. By clearing your balance each month - or at least as much as possible - and paying attention to any annual or hidden fees involved, you can save your business money and boost your profit margins.
Don't get distracted by the attractive rewards when signing up for a credit card. Instead, make sure you read the fine print and understand the fees before choosing a card. This will help you to use your card wisely and avoid any money leaks.
6. Smartphone Bills
You could be paying more than necessary if you're not keeping a close eye on your smartphone bills. Make a habit of reviewing your monthly charges to ensure that you and your staff are within your plans. Take a close look at your usage, too, because you could be paying for more than you're actually using. It's also worth shopping around regularly to see whether you could benefit from switching plans or providers.
It Pays to Plug
By plugging these common money leaks, you can cut down on costs without making any real sacrifices. Regularly checking for leaks helps you make your business budget go further, so stay focused. Get into the habit of periodically performing basic checks to maintain a healthy profit margin and prevent your business from losing money.