Your business may be small, but there’s nothing small about its contributions to the economy. According to the Small Business Administration, companies like yours represent 99.7 of all employer firms. And since 1995, small businesses have generated 64% of all new jobs in the country, and accounts for 44% of private payroll salaries paid.
Of course, a small business is a lot like a small ship—for it to stay afloat in the market, it can’t afford to have leaks. Unlike mega-corporations, you don’t have as big a buffer and any money lost or wasted can hurt your firm’s future. What are the common money leaks you need to plug?
Yes, human resources are the most important asset of a company, but they are also one of the costliest. Take a look at your manpower and ask if the right people are assigned to the right tasks. Are there functions that you can outsource in order to save money? On the flip side, should you hire more people so you can increase productivity and profits?
Combined Bank Accounts
Never ever use one bank account for your business and personal expenses. When you do, you may inadvertently use business money for non-business expenses, and this opens up a whole can of worms. If you want clean accounting books, make sure to separate your money sources—even if you are the sole proprietor of your business.
The Small Stuff
… May turn out to be not so small after all. This often applies to expenses related to office supplies. For instance, you might think that printer ink is a negligible expense for your firm, but given their price, you’ll be surprised to see that you may be spending hundreds if not thousands of dollars just on this one supply. Again, cross examine all your office-related purchases to see if they add up to a lot of money over time.
Are you getting gouged by your bank when it comes to banking fees? If so, you should talk to them and try to negotiate a better interest rate or lower transaction fees. Most will be willing to come to a compromise with you as it’s cheaper for them to retain a client than land a new one.
That said, growing your company and keeping track of its finances is a tough juggling act. To ensure that all expenses are accounted for, and that money leaks are spotted and addressed ASAP, be sure to hire a trusted bookkeeping expert. With their help, you can better manage your cashflow and keep your bottom line in the pink of health.
5 Causes For A Small Business Losing Money, forbes.com
6 COMMON SMALL BUSINESS MONEY LEAKS AND HOW TO PLUG THEM, americanexpress.com