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Businesses are often looking for ways to cut their operating costs. They usually try to find ways to save money on energy, material, or suppliers. However, sometimes they don’t realize that it’s the small things that are affecting them the most. They do not spend enough time reevaluating or monitoring their processes and are paying for things they assume they should be paying for when they actually shouldn’t be. There is also minor waste that they might not realize until the end of the year when their numbers don’t add up. Let’s take a look at some of the sneaky ways small businesses waste money.
Paying Credit Card Fees
One of the things many small businesses assume they have to cover is credit card fees. But there’s absolutely nothing forcing you to do so. You can pass down the fees to your customers, all on the condition that you let them know with signage that there will be a surcharge for any purchase made with a credit card.
If you want to implement this policy in your business, however, you will need to go with the right small business credit card processing system. Services like NadaPayments can facilitate the small business credit card processing process by offering a payment terminal, POS service, and surcharge program all in one. Their solution will allow you to do things like detect when people are using a debit card so that they aren’t charged a fee. They will also make the registration with credit card companies easier and will send you a wireless terminal in a couple of days after you’re accepted.
Credit card fees can eat into your margins if you’re in a sector like the food industry, for instance. If you’re running a caterer service or restaurant, then putting this type of system in place will allow you to keep your price competitive without affecting your bottom line too much.
Disengaged Employees
A lot of business owners don’t realize how much of an impact unmotivated and disengaged employees on the floor can have. Not only can these employees affect production, but they can also affect things like security, sick leave and benefits, and your turnover rate.
A high turnover rate is probably the most insidious effect of having poor morale on your organization. First of all, you will be wasting money on recruiting and interviewing employees. Second, high turnover rates mean that you will have less experience on the floor. This comes with dangers like higher chances for accidents, but it also puts a strain on your experienced employees. Start losing your most experienced team members and you’ll be heading into serious trouble.
This is why you need to have systems in place to have your finger on the pulse of your team’s morale at all times. This includes things like frequent evaluations with active dialogue, anonymous reporting, more rapport between the higher-ups and employees, and more tools for learning and development.
Wasteful Processes
Inefficient processes are also affecting a lot of businesses. This is usually the case for older business owners that are stuck in their ways and have an ‘if it’s not broke don’t fix it’ mentality. But what many of these businesses don’t understand is that they can’t really tell if their processes are broken if they aren’t actively monitoring them.
The first thing you have to do as a business owner if you want to know whether your processes are efficient is to establish a system that will allow you to see every step in the process clearly. This can be done by using agile project management tools like Kanban, for instance. With tools like these, you can see each task in a clear visual chart and see exactly who is responsible for every part of the process. From then, you can start identifying bottlenecks and other issues.
If you notice a bottleneck in a certain area, then this might mean that this part of the process might need to be modified or needs more people. You can then start monitoring changes in performance after making modifications and accumulate and analyze data so you can constantly improve your processes over time.
Handling Too Much In-House
Companies that try to do everything themselves often end up making mistakes or wasting money. When it’s not money they’re wasting, it’s time that they could’ve dedicated to functions that would bring actual profits to their business.
If you’re handling things like payroll, accounting, or HR in-house, there’s a strong chance that you’re overpaying or not utilizing the employees you hired for these functions fully. So, we would strongly suggest that you look into outsourcing some or all of these functions so you can make immediate savings and make sure that the job is handled by experts.
As you can see, there are tons of different ways that businesses lose money, and they’re not all obvious. So, if you want to reduce your overhead costs, start looking at the details and look for the specific issues we just listed.
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