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How Small Businesses Waste Money


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Most business owners subscribe to the thought that you "must spend money to make money". This can be true, but you also must know exactly where that money is going and the results it brings. A small business owner never has any money to waste.

 

 

Some ways that your business might waste money includes the following:

 

 

 

 

 

1. Manage your credit cards - If you have several cards, develop a computer program that will show you the exact balances, due dates, and the interest rate you are paying. Always be aware of other solicitations that save you money and possibly change your balances over to a new company. If you have any employee cards, see if you can set a limit on them. If not with the credit card company, make sure that the employees know their limits. Manage your credit cards wisely and never, ever miss a due date.

 

 

2. Develop an annual plan so you know where you will spend money. This helps you in several ways. The business person will be aware of what portion of the profits are going to advertising, towards incentives, towards accounting and other internal expenses, etc.

 

 

3. Do not over-purchase any products or services for a business. If you buy in bulk, the money is tied up and a place must be provided to keep the extras. That might be an unnecessary expense.

 

 

4. Developing an advertising budget and knowing just what resources to use is key to keeping money under control in a small business. You must advertise, but you also must get value for your money or you will soon be out of business. Keep a record of how much is spent, can you get payment terms, when is the most efficient time to advertise your particular product or service to get the most value for the dollar. Every dollar must be accounted for in advertising because the lifeline of your business depends on new and paying customers. Advertising is the way to get the word out to the community or the Internet.

 

 

5. A small business owner will sometimes be under self-induced stress to manage all aspects of the business. Sometimes, leaving the control and decisions to others that are qualified is the best way to manage the business. Releasing control may be hard to do sometimes, but in a lot of businesses, money can be wasted because the owner cannot possibly be as efficient as the person who has studied or is knowledgeable about a particular field. For instance, if a business owner does not know accounting, many mistakes in reporting income and taxes can be made. A qualified accountant can possibly save more than the cost of their services in reduced taxes.

 

 

Take a hard look around your business and do not let anything be set in stone if saving money is the goal. Challenge everything that will cost money and see what can be done to change the situation. Any money that is saved is money that can be put back into the business either in profits or in growth.

 

 

A business owner wants their business to be successful and will work hard to sustain growth. A business owner wants a way to continue making and growing money from a product or service that is interesting to them. After growing a business and being smart with cash flow, many business owners will sell their businesses only to start another business.

 

 

The reason is that business owners are independent types and challenges are rewarding when met and faced. Saving money through every day operations will help the business owner to meet their financial and emotional goals.

 

 

 

 

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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