Keeping a budget for your business is a constant balancing act that requires periodic adjustment and changes. In order to keep your operating budget in check, you should be constantly evaluating all of the ways your business spends money, and making sure that they are worthwhile and helping you make money. But sometimes it is tough to spot expendable expenses on your budget sheets. Here are some things that may needlessly be costing your business money.
Whether you pay your employees hourly or salary pay, most businesses pay for their employees’ time, not the sum of their work. Because your employees' time is only worthwhile to your business while they are working, downtime is a major leak of money for your business that isn’t going to show up on a budget sheet. Encouraging your employees to stay on task, and finding ways to keep your employees working hard are great ways to keep downtime low. Even offering incentives and rewards to your employees for their work are great ways to get them working harder with less downtime.
Mistakes can create major costs for your business. Some result in huge amounts of money, shipping errors, invoicing errors, production errors, or errors in client facing workload, to name a few. If there is a mistake, you are either paying for something you didn’t need to, or needing to redo work that should have already been completed. Both are costly and should be avoided, with strategies that are proven to help. For instance, poka yoke is a strategy for minimizing errors in your workplace processes. Poka yoke involves placing behavior constraints on workplace processes that require human interaction to check the work and make sure everything is correct.
People care about appearances. A lot. So much so, that your company’s website is one of the most important marketing tools you have available to you. Many people will not trust a company that has an old, poorly designed, or finicky website, and so will not consider buying your products. This is especially true if you operate in the ecommerce space at all, allowing customers to purchase right from your website. Invest in a better website, using a professional designer, and you will make sure that potential customers and clients are not looking elsewhere because of a badly designed website.
There are a lot of ways your company may be losing money that won’t show up on an expense sheet. Operating a business is always a difficult enterprise, and balancing the expenses can be a tricky affair. But there are leeches on your budget that require some creativity to see. Consider these three costs to your business next time you are trying to cut costs.
Read this next: Why Is My Business Cybersecurity So Important and How Do I Improve It?