They say it takes money to make money, and there’s a lot of truth in that. But the reality is that the amount of money you’re spending in the course of running your small business may be excessive. Here are a few expenses you may be overspending on.
1. Onsite food and beverages
It’s nice to offer your employees perks like free coffee, snacks, and even meals. Doing so is a way of showing your appreciation while keeping your team happy and efficient. After all, if your employees need to run to the corner store or the Starbucks around the corner three times a day to refuel, it’s apt to impact their productivity.
At the same time, onsite food and beverages aren’t one of those standard benefits that all companies offer. While you may not be able to get away with cutting health insurance, you’re really not obligated to feed your staff all day. So if that expense has been wreaking havoc on your budget, it may be time to cut back.
That said, you may want to hang onto the coffee — and just eliminate the meals and snacks. Adequately caffeinated employees can sometimes be more efficient ones.
You need to market your small business — there’s no question about that. But are you overpaying to expand your reach? You may need someone to put in a few hours a week to update your social media. But do you need a 40-hour-per-week social media director? Perhaps not.
Take a look at your marketing budget and make sure it’s reasonable given the potential upside. If you’re paying a lot for print ads, for example, that aren’t driving a lot of business your way, then it may be time to pull the plug.
3. Credit card fees
Do you have a small business credit card that’s loaded with fees? There may be a more cost-effective alternative. Granted, small business cards with hefty fees tend to offer better rewards. But if you’re not benefitting from those rewards as much as you expected, then it may be time to downgrade to a small business credit card that doesn’t cost you as much.
4. Business lunches
Business lunches are a great way to network and branch out. But if you’re paying for three of them each week, it may be time to cut back. There are other ways you can get to know people in your industry, like attending trade shows or conferences. Those might cost more than a single meal, but they’ll allow you to make multiple connections in one fell swoop.
It takes money to run a business, and certain expenses you incur can definitely be regarded as an investment. Hiring an experienced and savvy accountant, for example, may be worth the cost, even if you can find someone who charges less. But it does pay to look at the above expenses if they constitute a large chunk of your budget and see if there are steps you can take to reduce them and conserve cash for your business.