3 Things that Small Businesses Waste Massive Amounts of Money On

While “getting more for less” is a best practice for all businesses, firms in the small business world need to treat this like a fundamental requirement: because paying too much and getting too little doesn’t just mean angry shareholders or unplanned asset sell-offs. Eventually, it leads to shutting down entirely.

Yet despite this fact, many small businesses continue to waste massive amounts of money on things that they either don’t need, or for which there is a much more cost-effective alternative. Here are the top three money pits that small businesses need to escape from now vs. later:

1. New Office Furniture

New office furniture is surprisingly expensive, with a single chair going for several hundred dollars, and a workstation or cubicle exceeding $1000. In most cases, it makes far more sense to purchase used office furniture, which looks and functions like new (or very close to it), but at a savings of anywhere from 10-25 percent depending on the item, marketplace, and so on. Just make sure that you work with a reputable used furniture dealer vs. someone in a van who won’t give you his last name.

2. Conventional Phone Systems

If you thought that phone companies make their profits from residential customers, think again: the real cash cow is businesses, including small firms that pay thousands of dollars a year for bloated, bulky systems and vague “maintenance contracts.”

The good news is that there are alternatives, including hosted VoIP solutions that have zero CapEx costs, and offer enterprise-grade features (e.g. web conferencing, auto attendant, voicemail-to-email, system-wide instant messaging, and so on), but for a fraction of the cost. And if you’re concerned about calling quality or reliability, then relax: this isn’t 2005. VoIP for business has come a long, long way from the early Skype days and many providers commit to 99.99% guaranteed uptime.

3. Traditional “Interrupt” Marketing

It may be fine for Apple, IBM and to spend millions of dollars a year on traditional “interrupt” marketing such as TV and radio spots, and placements in print magazines, newspapers, and so on. But for many small businesses, this is a black hole from where no ROI is to be found. It’s much smarter — and safer — for small businesses to focus their resources online (e.g. inbound marketing, SEO, PPC, etc.), and if necessary augment it with limited offline spending.

The Bottom Line

As the adage goes, “you have to spend money to make money.” However, small businesses that get ensnared by any of the above financial pitfalls typically end up in damage control mode — and in some cases, going out of business altogether.

Fortunately, now that you know where the traps are, you can safely eliminate them from your small business, and keep them at bay throughout your profitable, growth-oriented future!

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