Do you have entrepreneurial objectives and are just figuring out where your visionary and managerial boundaries are? Then of course you also have to deal with the money side of your company. The financial equation, however, has two aspects: the money coming in and the money going out. If you are like most small business owners, you pay attention to the actual cash you have, but you devote less attention to where the cash goes after the sale. Therefore, the Open Forum prepared a number of indicators that are the sign that your company is bleeding money.
1. Not watching expenditures by category. It is shocking, but many business owners neglect this factor. If you do not know what you are spending money on and why, make a budget of expenditures for the last six months. Then try to reduce it by 10 percent. Some banks provide these categorical statements free of charge as part of your online banking.
2. Too much technological equipment is another source of financial bleeding. Yes, you need a computer and phones, but definitely not the newest or the most expensive on the market. It is tempting, but if you want to be thrifty, you can purchase used technology, which will surely serve you for a few more years.
3. Conferences, events and meetings organized in your industry may also swallow some financial resources. Certainly, you want to gain new experience, contacts and information, but you do not need to go to such meetings five times a year. Rather, go to only the best event of the year and minimize the number of people who go there with you. Choose the second conference relating to an industry that provides services to your area. You will get much more out of it.
4. Inability to negotiate prices with your business partners and suppliers indicates, in many cases, that you overpay them. Give your most expensive suppliers a counter offer. Even if they will say no, it is definitely a great workout for further negotiations.
5. Variable costs are out of control, and thus all the cost of cleaning products, office equipment and refreshments cause financial bleeding. Monitoring them is difficult, but if you identify four variables that can be reduced by simple monitoring and control, you will certainly help to lower the total costs.
6. Equipping offices is indeed important in order to prove to your potential customers and partners that you are a successful company. However, too many small businesses overrate this factor. Furnishing an office gracefully can be easily done with mass-produced furniture, and you can also buy some pieces second hand.
7. Outsourcing company overload is another factor of financial burden. Large companies can afford to optimize their workforce by hiring outside contractors for special tasks. In case of smaller companies, however, you need to watch this factor more. A good piece of advice is to use the money you would spend for four hours of time with a consultant on education and training for your own team members.
8. The media is very important to your company in order to promote it. Sure, you need a website, maybe some enhanced social networking services and other classified advertising. However, you should think carefully about the real benefit of expanding your use of services that you have to pay for, when you could get the same services, at a more basic level, free, and also, if the extent of your advertising is really necessary.
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