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Expenses Your Business May Be Wasting Money On (And Tips to Reduce)

By | Drew Page | Content Marketing Specialist | siegemedia.com  

The global economy is currently in a period of contraction and with the uncertainty and fear that accompanies downturns, businesses are making drastic changes to preserve their balance sheets. 

As Warren Buffett has famously said, “Only when the tide goes out do you discover who’s been swimming naked.” This clever way of saying that highly leveraged businesses will have no protection from a downturn is certainly being proven accurate in this market. 

As a business owner (and individual), sound financial planning and decisions can benefit you enormously over the long-term and especially in times of crisis. In this article, we cover some of the more costly considerations you will need to make regarding your business. 

Management Expenses

Management and operating expenses can be some of the most wasteful costs to your business. Take that expensive office space, for example. Businesses often sign a lease for a space that they can “grow into,” meaning they are paying for more than they actually need. Today, there are better ways to grow into an office space, or even grow out of office space.

One way is to let more senior employees work from home more often, freeing up desk space for other employees. Shared workspaces allow you to have a larger team in a smaller, and less expensive, office space. 

Another way is to build a fully remote, distributed workforce. As the world is currently in an involuntary experiment whether or not we can successfully work from home, why not use this as a time to analyze whether your business can survive as a distributed workforce. 

HR Expenses

Human capital is one of the most important, but also expensive, resources within your company. An outstanding team is rare, and if you are forced to layoff your top employees, it can be detrimental to morale and performance. 

One way to avoid mass layoffs is to operate with employees slightly over-utilized. This may seem counterintuitive as you also don’t want your employees to be stressed, over-worked, and over-taxed, but you certainly don’t want them underutilized. 

Another way to optimize your workforce is to utilize contractors and freelancers whenever possible. One-off projects, temporary gap-fills, or other situations that can prevent you from having to hire more full-time employees can be effective in productivity but also financially. 

Be Fiscally Responsible in Your Business

The global pandemic will temporarily impact the greater economy, but those who were prepared will survive and even thrive coming out on the other side. 

If you want even more advice on how to be more fiscally responsible in business, check out the full visual below from Embroker featuring 16 business expenses to reconsider

 

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