All businesses (unless they’re non-profit) have one thing in common: they all need to turn a profit. The easiest way to turn a profit is to avoid wasting money as a small business. So read our tips to learn more about how to save and grow without spending money.
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- Use Social Media to Improve Small Business Customer Service
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4 Ways to Avoid Wasting Money as a Small Business
To start, the first step is to understand what a “deal” means to you.
1. Deal or No Deal?
Often, we as small business owners are bombarded with advice, especially when it comes to deals. Not all of this advice is bad, however, but whether something is a deal, only you can decide.
Importantly, the biggest mistake many people make is to focus on price versus value. In other words, if you focus on the value it provides to your small business, you avoid wasting money. It’s a shortcut to long-term success, in many ways.
Have you ever bought something cheap, and it broke or didn’t do the job, etc., only to have to buy something else? I think we all have. But, it teaches us a great less about value. Value is a measure of quality for a given price. Granted, value is tough to measure because quality is tough to gauge. But, the key question is really ‘will it do the best job at that price level’?
2. Minimize Impulse Buying to Avoid Wasting Money as a Small Business
Let’s face it. We all buy on impulse. It happens. There are many who will say “never buy on impulse”. While that’s great in theory, we all know it’s going to happen. The key is to minimize it. So, when the urge hits, take a breather and ask, do we or I really need this? Therefore, if you are buying something, you should have a reason, even if it’s just to treat yourself.
3. Have a Reason to Buy is a Great Way to Avoid Wasting Money as a Small Business
Building on the last point, you can avoid wasting money as a small business by ensuring that all your purchases have a purpose. Some small business owners are really good at this. In contrast, some aren’t. If you fall into the latter category, then, it’s helpful to make a list of what you spent for a week, 2 weeks, or a month. Next to each purchase, put a check if it had a reason. Count how many checkmarks you have. Granted, it’s a bit tedious. But, it’s a good tool to help track and train new spending habits.
4. Find the Hidden Inefficiencies
Look, most small business owners didn’t start their businesses because they had business degrees. So, it’s likely that there are some hidden inefficiencies in a small business that are wasting money. To avoid them, it can be helpful to analyze your business model once and awhile.
It’s so easy to get caught up in the day-to-day running of the business, you may not even notice that inefficiencies have crept in. For instance, continuing to use a given service because you forgot to cancel it. Or, for example, paying bills late because you were too busy to get to it. It’s things like that which can save you from mistakes that will cost you in the future.
Therefore, It’s often helpful to get some outside advice as they can look at your business from an unbiased perspective. Once you have identified the issues, you can avoid wasting money as a small business.
In summary, if I haven’t convinced you by now that these steps are important, maybe this will: 82% of businesses that fail, do so because of cash flow issues. So, let’s work together to prevent that.
At ProStrategix, we know you have concerns. We’re designed to help give you the business support you need so you can focus on doing what you love. If you would like to learn about how we might be able to help you, please contact us.