There are more ways to lose money in business than to make money. In fact, if you’ve been in business for any length of time, you know this adage can ring very true. Here are a few mistakes that have killed even successful businesses.
Too Many Meetings
The 1980s called — they want their meetings back. If you spend more time in meetings than you do making sales, then your business is in trouble. Having too many meetings is the hallmark of a company that can’t find itself, doesn’t know how to turn a profit, and spends way too much time trying to compensate for poor marketing.
Keep meetings short, and to the point. First, address standing problems that need to be fixed. Next, resolve to solve those problems with step-by-step action plans. Then, push progress by initiating a plan for more sales through better marketing initiatives. Again, keep it in a step-by-step format. Finally, close up the meeting with accountability protocols. Make sure everyone knows exactly what they need to do, how progress will be tracked, and rewards or incentives are in place for achieving or beating goals.
Keeping Paper Documents
Keeping paper documents is expensive. The cost of space alone can be astounding, with a standard filing cabinet space accounting for over $70 per year. And, that’s just for basic document storage. That doesn’t include documents that need to be secured or require special handling.
These kinds of costs can become overwhelming, especially for small businesses that are strapped for cash. You can mitigate this problem by keeping documents organized and backed up online.
This is much more efficient for document storage.
And, unlike physical copies, digital copies only take up a fraction of the space — space that’s essentially just the size of the hard drive being used to store them.
When you do need a physical copy, you can always print one out.
Using Too Much Paper
Speaking of printing, you should not use so much. The average office uses over 10,000 sheets of paper in a year. Roughly $80 per employee is spent printing. There are also additional costs throughout a paper’s lifecycle, which include copying, handling, shipping, storage, and even shredding and document destruction.
Using digital versions solves this problem.
Keeping track of your business receipts is important, but many businesses still use paper receipts instead digital ones. These tedious systems result in processing costs of roughly $29 for a typical expense report. Ouch. Over time, these reports get to be really expensive as a total cost. Instead of expense reports, use automation. Automated expense reports require that you use digital receipts, but the efficiency gains make up for any inconvenience. Take a snapshot of the receipt and then throw it away.
The average executive wastes about 6 weeks every year searching for important documents. An employee earning $60,000 would cost $6,290 for the company every year in wasted time. Instead, keep documents online. You can search for them easily enough by keyword and type. Going digital also lets you take advantage of novel naming structures and cross-reference patterns. Instead of taking hours to find what you’re looking for, it should only take mere seconds.
Security breaches cost data centers about $640,000 per year. That’s up 23% from the previous year. And, it’s due to the long recovery time, which takes 31 days, with a cost of $20,000 per day. The prediction is that it increases the costs as you store more data in more places while you don’t pay attention to the storage process.
Instead of doing this, find a cloud service or file-storing service. Find a service that only uses programs that encrypt your data at 128bit level or higher. 256 bit would be ideal for financial and other sensitive data.
This goes double when you use an ecommerce fulfillment provider — make sure they secure all data and transactions, and customer data.
Roughly 40% of small businesses rack up an average of $845 per year in IRS penalties for filing mistakes. Accuracy on your returns counts, big time. But it can be challenging if you wear multiple hats. Outsource your taxes. This is the easiest solution. Because you’re not a tax expert, it’s best to let others who are handle the tax stuff.
It may not be cheap, but it will save you money over the long run. Tax specialists range in quality. Try to find yourself an enrolled agent. Contrary to the name, they are not enrolled by the IRS. They are independent tax consultants who have specialized knowledge in filing tax returns and preparing taxes for individuals and businesses.