9 Tasks New Entrepreneurs Should Table Until They're Making Money
Jun. 29 2022, Published 8:00 a.m. ET
When you are just starting the business, you begin to think about ways and strategies to quickly reach your goals, which can sometimes result in you spending more. But did you ever think that maybe spending money on these items could be why you are not growing? Yes, we all want to make money right away, but spending more before your business is making money isn’t good.
So, what should you do? Here are nine Items to table until your business is making money.
1. Having A Lot Of Full-Time Employees
Don’t get me wrong, having employees is never a bad thing, however, having too many full-time employees costs more for a little less progress in a day than getting average progress results in a month. Oftentimes, part-timers and subcontractors can fulfill the same job as full-time employees. You can also let the part-timers suggest they work full-time when deadlines must be met for an extra increase.
2. Hiring Underqualified Staff/Workers
It's common for businesses to make the error of hiring too many employees. Although some businesses may grow quickly in employee numbers, over-hiring unqualified workers can be a costly mistake.
Always start by selecting quality workers to know how many people you need to hire overall.
3. Investing In Office Space
This is an expense that lots of businesses have taken for granted. If you start as a remote business and you have decided to rent or buy an office space, you have to make sure that the costs on this one can be made up with the sales from the business. Remote businesses have given us tons of benefits, like more productivity and an engaged workforce. To have an office space means you should be getting better benefits with the business. If not, I don’t recommend you buy or lease office space.
4. Choosing Inexpensive And Ineffective Short-Term Solutions
Cheap solutions to save money but are still unable to fix the problem is the worst way to lose money. Instead of being hesitant, you should go all-in when finding a solution to the business problem. Think long-term regarding CRM, people, hardware, or software. It's worth paying a little more in order to keep the business running smoothly.
5. Offering “Over-The-Top” Employee Perks
I know how you feel about drawing in candidates with talent and potential. In the early stages of business, you can not offer as much to keep your high-potential workers happy with great perks, workspace, or compensation. You have to focus on getting top prospects who believe in your mission to succeed in the business and are willing to make sacrifices along the way.
6. Making Random Business Travel Appointments
Visiting a potential partner with no itinerary can cost you a lot of money. The best advice is to think wisely and plan ahead because travel costs are really expensive these days. Booking your travels at least two weeks ahead and on weekends are also good ways to save more money.
7. Hiring Leadership Roles Outside
Small business owners should never find candidates outside of the business for their leadership role, at least when you’re just starting out. The business should be led by someone who has been there and knows what is happening in the business. It’s better to find leaders from the current list of business employees, as this will strengthen your relationship with the employee and you as the owner.
8. Providing Expensive Reimbursements
Never overlook the amount of money that was spent or wasted on meals, entertainment, travel, etc. You need to create a well-documented business expense and reimbursement policy early on to adjust pay on dividends. Budgeting should be accurate and having control over the expenses can make everyone happy.
9. Hosting High-Cost Celebrations
I agree with the desire to celebrate when we successfully accomplish a milestone but you don’t have to make it more lavish or elegant by spending more money. Saving more for the future is essential as business goals become more challenging to accomplish. Make sure the money is still on the budget. The goal is to keep growing and keep earning more. It's never a good idea to make huge cuts on the reserve as time goes by because the cost grows and you should prepare to spend the necessary money.
Making things better and operating the business smoothly always involves money. But at the same time, you cannot make up for huge spending at the start of the business. The income needs to come in first, then you get to decide on spending for improvements to the business. By following these steps, you can easily determine if spending money on those items is worthwhile. If you decide to keep the expenses, do it for the right reasons.
This article was written by Sharita Humphrey and appeared on Score.