Boss Lady

How to stop wasting money on things that reduce your bottom line


This guide outlines ways you can stop wasting money in your business and improve your overall profit results. The difference between your revenue and expenses is your profits (or lack thereof).

For instance, if you get $1,000 in revenue every month and spend $900 getting that revenue, your profits are $100 for the month – or 10 percent of your total revenue. Most companies make between 5 and 10 percent margins on the income they earn. But that doesn’t mean you should shoot for 10 percent and leave it there. You want to continually push the boat out, looking for opportunities to grow your revenues and reduce your costs wherever you can. 

Imagine if you reduce your expenses by 10 percent from $900 per month to just $810? If your revenues stayed at $1,000, you’d increase your profits by 90 percent from $100 to $190. That’s a 90 percent increase – a near doubling of profits – by simply reducing your costs by 10 percent. The problem is that many companies waste money. They don’t think carefully before they spend. Many otherwise profitable businesses fail to break even because they spend money on things that they really don’t need.

Ways to stop wasting money in your business

In this guide, we take a look at how you can run your business in a lean way and, hopefully, stop wasting money. Here’s how you might be wasting money and what to do about it. 

Premature Scaling

Companies – especially startups – like to scale fast. They believe that if they build it, they will come. Unfortunately, though, that’s not the case. If you build it, they will not come in most cases.  You can prevent this by scaling as demand ramps up to avoid wasting money. If your team is working weekends, for instance, it’s a sign that you need to hire new staff. If your shop floor is full and customers are queuing out of the door, it is a sign that you need a bigger premises. 

Accounting That Doesn’t Add Value

Company accounting is expensive. Firms can wind up paying a fortune to get professionals to prepare their books. In many cases, though, they are paying for more than they actually need and wasting money. If you run a small, simple business, you don’t need highly specialised and expensive accountants to do your returns. You just need someone who understands the basics – and they tend to be quite cheap. 

Buying Expensive Tools

Software subscription prices always seem so reasonable. $49 a month for antivirus and $99 per month for word processing seems like great value. But consider for a moment just how much all these services cost over the course of a year. All of a sudden, they don’t seem like such great deals. Many new companies spend more than 10 percent of their revenues on buying expensive software tools. They believe that they will more than pay for themselves but, unfortunately, they rarely do.

Remember, a lot of these tools are built with large enterprises in mind. They offer value at scale, but if you have less than 20 people in your office, they probably aren’t worth it and are wasting money. You only need them when your company employs a large number of disconnected people across multiple teams. If that doesn’t sound like you, stick with spreadsheets. 

Cheap But Ineffective Long-Term Solutions

Some companies undermine their future by investing in cheap solutions today that will crumple under the pressures of tomorrow. For instance, developing some cheap software to cater to 100 customers today might seem like a great idea. But if you want a million customers, that solution isn’t going to work and you’re going to require a whole new product to meet your audience’s needs, thus wasting money. 

The trick here is to only develop systems that you know you are going to need in the future. Put a base in place that will allow you to process any number of customers, regardless of how much business you ultimately wind up winning in the future. 

Overspending On Office Space

Spending too much money on office space is something that businesses are apt to do, wasting money in large amounts. Usually, it is because they don’t understand all the options available to them, as explained by  These days, you don’t have to rent an office in the typical way, choosing the square footage and then signing up for a multi-year tenancy. Instead, you can dip in and out as you want – renting for periods as short as a month.

Many companies adopt this approach until such time that they have a business model they know works. Other firms use it to cut costs or experiment with home working arrangements. Whatever the reason, flexible office spaces tend to be better for younger, smaller firms. 

Making The Wrong Hire

Firms often wind up wasting money on the wrong hires – something that is much more common than you might think and leads to wasting money. Executives believe that they need in-house professionals for marketing, finance, sales and operations because that’s how firms have always done it, but that’s not the case. You can usually outsource those tasks to third-parties, paying dramatically less than the cost of a single salaried employee. 

You might also make the wrong hire out of sheer inexperience, not knowing precisely how your company operates. If that happens, you’ll need to undo the damage as fast as you can, either by reassigning the new hire, or letting them go, preferably at the end of a trial period. 

Too Many Employee Perks

You want to attract employees to your organization, but going overboard with perks probably won’t help you. Yes, staff want good pay and conditions, but overdoing it can put your bottom line at risk by wasting money.  Remember, staff will quickly acclimate to improved remuneration. It’ll feel good for the first couple of months and then they will adjust their expectations, wiping out the initial effect. 

The trick here is to find non-financial ways to motivate people. Perhaps the best approach discovered so far is to infuse them with energy from your company mission. The more they feel aligned with your goals and objectives, the more they will work with passion and drive.  To achieve this, you’ll need to properly communicate what it is your company is trying to do and why it is important. If staff don’t understand the value of their roles, they will always see work as purely transactional – they give up their time and, in return, you get their work. 

Too Much Business Travel

While business travel is sometimes fun and valuable, it’s not always necessary. Meeting associates in person can help seal a deal or get more oversight over a project, but so many things can now be done online. Nobody is saying that you should abandon business travel entirely. However, you should cut down on it where you can, particularly if you are running a startup. Extra expenses like that can soon add up in wasting money. 

Banner Ads

Banner ads are expensive and, what’s more, they don’t work, so are just wasting money. Most people’s brains now automatically block them out. So, even if you are selling something that they need and want, they probably won’t notice anyway. Studies show that only around 35 percent of people even see banner ads on websites, with around 4 percent looking at them for more than two seconds: that’s appalling. 

The trick here is to switch your advertising strategy to native and influencer advertising. If you can leverage popular social media channels and write engaging, non-promotional content that relates to your brand, you are more likely to succeed. 

Investing In Branded Swag

While swag can be a lot of fun, it isn’t always necessary. Evidence suggests that it does make customers feel good, but there are other more targeted ways to do that when you’re on a budget without wasting money. 

If you do want to include swag, make sure that you target it to the needs of your customers. Don’t assume that they all want t-shirts with your logo on it: they probably don’t. Flog genuinely helpful items, like backpacks, tools, and stationery. 

Ineffective Consulting

Consulting services can be a boon for business. Sometimes, consultants can ride in and totally turn a brand around, making it a success whereas before it was a failure.  However, you have to be careful who you choose. Many consulting companies charge high fees but don’t really provide you with commensurate value. 

Avoid any consultants who are vague. Choose those with systems that they believe genuinely work. Ask them for evidence of their systems in action and how they helped other organizations to avoid wasting money. 

Fake Audiences

Buying fake audiences seems like a great idea at first. You simply get third-parties to create personless accounts to follow, like and share your activity. However, there are some catches. First, social media companies don’t like the practice, so you might get a warning or even a ban if they find out. 

Second, the accounts don’t have any real people behind them, so they will never buy from you. Ultimately, it’s just vanity and wasting money. It’s not telling you anything.  Lastly, it distorts your social media analytics. You don’t really know who is following you or not.  You’re much better off spending your money on attracting a bigger real audience. 

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