There are some expenses in business that you need to make. All companies should prepare a business plan, do market research, and get legal advice.
But there are also a lot of unnecessary expenses out there. And while these things are nice to have, they’re not essential.
Unfortunately, many entrepreneurs don’t know the difference between essential spending and things that are just a waste of money. Often, spending is just automatic. Leaders assume that they need things that they don’t.
So what is your business paying for right now that, in reality, shouldn’t cost you anything? Let’s take a look:
Some companies never spend money on marketing or outreach. And while they are rare, they set an example for everyone else. The lesson is this: you don’t need to go to every agency under the sun to get your message out there. There are free ways to appeal to your audience, particularly when setting out.
Remember, even if you do invest a lot of money into marketing, your enterprise probably won’t be big enough for you to meet demand. That means you could end up overcooking it if you spend too much, leading to brand damage.
Accounting and finance cost most startups a lot of money. They spend a fortune on consultants because they believe they have “complex tax positions” or can save money.
In most cases, though, neither is true. Startups usually have pretty simple finances, and opportunities to reduce tax bills through clever balance sheet manipulation are few and far between.
Try using free accounting software instead. It lets firms hook multiple users to the network, allowing people to enter receipts on the fly. It’s excellent for firms that want to reduce the amount of administration they do and avoid high fees charged by conventional finance experts.
Offices should have printers. That’s what startup founders are raised to believe. But that’s rarely the case with screens and the cloud. Yes, you’ll need to use printers when it involves legal matters. But having colleagues print out pile upon pile of paperwork every day is often wholly unnecessary. You can share everything online.
The list of subscription services that small companies sign up for is enormous. They buy everything, from publishing suites to CRM management tools.
The reality is that most of these tools only work when operating at scale. They don’t do as well in smaller firms or those just getting started.
That’s because the lion’s share of the profits is at the enterprise level. Firms with more than 500 employees make their vendors the most money, so the incentives to develop solutions for smaller startups are considerably less or lacking.
For now, ask yourself whether you’re getting a good return on your software investment. If you’re not, it could signify that you should cancel your subscriptions and move to a different operating model – at least temporarily.