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Whether you run a new business or one that has been around for years, to be successful you need to limit the amount of wasteful spending, as it can be costing you huge amounts of money each and every year. Reigning in the spending and being on top of your asset management doesn’t have to mean being miserly, you just need to make sure your business isn’t just throwing money into the wind. The following are some of the most common ways a business can be wasting its money.
The number one way to easily waste business funds is through unnecessary spending on expense accounts. Business expense accounts should only be used for necessary purchases, and while this may sometimes mean a dinner with or a thank you gift for a client, going overboard with your expense account spending is an easy way to reduce your profits. Make sure your staff know what they can and can’t use company money for, and consider auditing your expense accounts regularly to eliminate the temptation for them to charge an inappropriate expense. The better your asset tracking, the less likely you will have any issues with inappropriate usage.
It is easy to get carried away when it comes to marketing, and often money is used for no real benefit. Make sure that you have a solid idea of what it is you are trying to do with your marketing, and keep your marketing plan simple at least until your business is stable and successful. Once you have a more solid footing and a little more financial backing, then gimmicky marketing techniques may be worth investing in. So, until you have money to spare, keep your marketing simple rather than wasting it on expensive methods that are no guarantee for success.
Having equipment that works well and is appropriate for the work that your business does is a great start on the road to success, but be sure to choose your equipment carefully so that it isn’t wasting your business’ money. Buying unnecessary gear is a huge waste of precious resources, as is buying equipment that is of poor quality and that will need replacing frequently. If you don’t want to waste your business’ money, buy equipment specific to your needs and make sure you get something that is likely to last.
While it is a good idea to throw a party every now and again – whether to boost staff morale or thank loyal clients – be careful that you don’t go overboard with your fancy celebrations. Having a party is one thing, but super expensive ego-boosting wine and caviar parties are taking things a little too far. If your business is successful and you no longer need to stay on a tight budget, then extravagant parties can be a lot of fun, but if you are still starting out and don’t have endless amounts of money to spend, show off a little less and have fancy parties less often.
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