Business owners are always looking for ways to save money, and cutting expenses is often necessary in order to avoid cash flow problems. While you should always be on the lookout for ways to save money, sometimes spending a little more is actually in your best interest.
Don't sacrifice quality for cheapness when it comes to significant parts of your business.
No matter what you're spending money on, if it's significant to your business, quality should be the priority. That doesn't mean that you need to opt for the most expensive options, but choosing cheap, low-quality materials can negatively impact your operations. It may mean that components are not working the way they should or that items don’t last as long as they should.
Don't skimp on legal help
Not paying for good legal representation may end up costing you big in the long run. You may be tempted to seek help from someone you know personally, a friend-of-a-friend, or family member because it's convenient and may save you some cash. However, this is not an area where you want to pinch your pennies. You need someone who understands the ins and outs of your industry and/or whatever legal situations you may find yourself in.
The same goes for accounting
We're talking about your finances, which at the end of the day are what keep your doors open and your staff employed. Don't trust such an important facet of your business to someone who lacks solid credentials and a firm grasp on the business. You may be able to save a little money in the short term, but your company's financial health is worth far more than that.
Pay your staff competitively
Pay competitively to attract and retain top talent. If you don't, you risk losing it. It's that simple. One of the biggest challenges small businesses face today is finding qualified talent. The right person for the job is likely in demand, and if they can find a better opportunity somewhere else, you may be left with a bigger problem than paying them a little more in wages.
That goes for benefits as well
The same mentality can be applied to benefits. Find out what types of benefits packages your competitors are offering to their employees and strive not to be outdone. If your top talent can be treated better somewhere else, that's where they're going to end up.
According to Harvard Business Review1, the most important benefits to workers are as follows: health, dental, and vision insurance; flexible hours; vacation time; work-from-home options, student loan and tuition assistance; and paid maternity/paternity leave. Other benefits workers consider include things like: free gym memberships; day-care services; fitness/yoga classes; free snacks; free coffee; company-wide retreats; weekly, free employee outings; on-site gyms; and team bonding events.
Don't underestimate the importance of your business's image. Cheapness can make your business look bad in instances where the purchase is appearance-related, as in office furnishings, promotional materials, or signage. Present yourself as successful. Don't turn off customers with a cheap and unprofessional presentation.
Don't fail to hire enough staff
Make sure you have enough workers to take care of business. Employees cost a lot of money, but if it's the difference between getting the job done well or not, it makes sense to pay for help. Beyond the boost in productivity, your other workers will be relieved that their burden has been eased, which means they'll be less likely to look elsewhere for a job.
Finally, if you're penny-pinching, you're probably trying to do too many things on your own, which means you're spreading yourself too thin. Put in your time where it matters most and pay others to do work that takes you away from where you're most needed.2
2. See this article on how to start delegating tasks: https://nevadasmallbusiness.com/keep-your-focus-with-these-tips-on-how-to-delegate-tasks/
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.