As a small business owner, you have a lot to deal with – there’s managing growth, hiring the right people, marketing, and customer service. There’s also the matter of managing your finances. One of the biggest reasons small business fail is poor money management. It’s easy to overspend if you’re not careful. Before you get overextended, ask yourself if you’re making any of the following spending mistakes.
1. Paying for all Your Office Supplies
Office supply expenses can really add up, but there are ways to score supplies for free. Sign up for the rewards program at your favorite office supply retailer (Staples, Office Depot, and OfficeMax all have them), then look for emails offering free supplies. You end up buying the items at full price, but you receive the entire amount back in the form of a rewards certificate.
Retailers run these specials at different times, so sign up for all three rewards programs. You can score lots of standard supplies, including printer paper, batteries, pens, staplers, scissors, and storage boxes.
2. Not Using Social Media
If you’re spending lots of money on traditional marketing and advertising, consider shelving those expenses temporarily to try your hand at social media marketing. Start offering promotions and discounts through your social sites, such as Pinterest, Facebook, and Twitter, and monitor your results to see if you start generating more sales.
3. Failing to Negotiate
As a small business owner, you possess the power to negotiate the price of anything you choose to spend money on. When working with vendors, ask whether buying in bulk would result in a discount, or ask if your current vendor can beat the price of a competitor.
4. Forgetting to Review Vendor Contracts
Review your vendor contracts regularly to make sure you’re getting the best deal. At least once a year put your major contracts out to bid, requesting quotes from at least three vendors. New technologies or changes in market norms can significantly impact pricing over time.
5. Not Bartering
Consider leveraging your knowledge to barter for services. For instance, if you’re a tax professional, offer free tax help to a freelance marketer in exchange for their services. Both of you benefit without spending a dime.
6. Overspending on Computer Hardware
Whether your business needs laptops, printers, tablets, or smartphones, make eBay and Amazon your friend. They both provide access to cutting edge technology products, often at a discount. Just be sure to vet the rating of the seller – don’t buy from anyone with a rating lower than 98%.
Just because you need to save money, doesn’t mean you shouldn’t also invest in your company. Don’t hesitate to pay more for a qualified employee – it can reap benefits for years to come. Purchasing eco-friendly appliances is also worth it – you’ll reduce your energy costs over the long run. Finally, providing your team with the tools necessary to provide a superior customer experience is money well spent. There’s a time to save and a time to spend – be sure you know the difference.
What other spending mistakes should small business owners avoid?