Think of your business as a car. If there are holes in the gas tank, even tiny ones that only cause minute drips every now and then, then eventually your car is going to run out of gas long before it should do. And then you’ll be stranded in the middle of nowhere with a car that won’t start. Now replace ‘gas’ with ‘cash’. If you’ve got leaks in your business through which cash can escape, then you need to plug them up. If you don’t, then disaster could strike before you know it.
The best way of doing this is ensuring that you get the maximum amount of worth from every penny that you spend. This means that you should have pretty high quality standards when it comes to making purchases for your business. You may not have an exorbitant amount of capital, but sometimes cutting costs when it comes to setting up your business can actually waste more of that precious cash in the long run!
Here are a few essential tips that will stop you bleeding your business dry with bad decisions!
Getting too many employees
For many budding entrepreneurs, the size of their business directly correlates with their level of success. And many people see the size of a business in terms of the number of employees working for them. This makes it sound like an ego problem, but it can be more than that. For example, many business owners will hire full-time workers for certain jobs just because they want maximum effort and attention being paid to that job. But the fact is that you may only need part-time workers or even outsourcers for certain jobs while you grow your business.
Getting too many bad employees
So you haven’t gone overboard when it comes to hiring – but the people you’ve hired aren’t exactly the best you could get. Sure, sometimes inexperienced workers can surprise you. But the motive behind many cheap hires is saving money. And this can result in low-quality work. If you want to ensure quality, sometimes you need to fork out a bit more in salary pay to ensure you get the best in the industry. You may want to consider working with a recruitment company to improve this process.
Using outdated or inferior technology
You may think you’re being smart and saving loads of money by giving everyone computers that run a lot slower than newer ones. But the problem with slower equipment is that it takes so much longer to do the same job, and often it’s done without the same level of quality. You also need to consider the stress that employees will endure working with slow or convoluted machines. Stress leads to burnout, leading to high employee turnover. Don’t be afraid to invest in strong and reliable equipment.
Investing in an office you don’t need
Offices are one of the most expensive assets for a startup. But are you sure you need one? Many modern businesses are opting for work-from-home options during their startup phase. This isn’t something you need to stick to – many businesses move on up to their own office once they’ve hit on some success. And, quite often, that success was helped greatly by the savings they made by working remotely!