In the current day where 'money makes the world go round', you can't afford to waste any. As a start up small business, every cent counts. Therefore don't waste time with rookie mistakes, that could potentially risk any of it. Here are three ways many businesses waste money and solutions to minimise the chance your business makes them.
1. Bad recruitment
Your qualified employees will waste time, and therefore money, trying to get a bad hire up to speed with the rest of the company. If you hire the first person who comes along – regardless of their competency – your company could be wasting precious money. In fact, a survey published in a Forbes article found that the turnover cost as percentage of an annual salary for just an entry-level worker is 30-50 per cent.
In getting a bad hire up to speed, capable employees are wasting time and therefore money. By hiring the first candidate who comes along - regardless of competence - could cost your company precious income. It was even found that the turnover cost of an annual salary for just an entry-level worker is 30-50 per cent.
The solution: It's always better to take the time and wait, if necessary, for the perfect candidate to come along. Ensure to carefully assess all potential candidates before interviews occur to avoid wasting both time and money.
2. Not paying bills on time
Late payment will severely hinder your business in the long term. There will be black marks on your credit score, late payment fees and a cycle of overdue debt will begin which will hinder future payments to suppliers and staff. A bill left too long will become a default - which remains a visible black mark on your financial capability for up to five years.
The solution: Simple - pay your bills on time. Implement a system to track your financial records, thus enabling you to pay everything on time. Or, another option is to outsource your bookkeeping to someone who is professionally capable and reliable.
3. Failing to harness technology
Technology is a massive asset to small businesses. Previous research indicates that up to 63% of businesses are using services such as PayPal, BPAY or mobile systems, typically used to chase up unpaid invoices and many find it useful in ensuring a steady cashflow.
However, this leaves 37% who aren't taking advantage of technology to improve business. Therefore, money not spent is money wasted.
The solution: Look at your digital payment solutions. Many things, from sending invoices to securing payments can be done online. Not only does this save time and labour performing these tasks manually but ultimately money in the long term as well.