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7 Needless Expenditures to Stop Paying Today

needless expenditures

At some point, every business makes needless expenditures that sap valuable time and resources from other projects, and damage the bottom line. These excessive costs—which also detract from funding new customer acquisitions or product upgrades—often perpetuate themselves, making it very difficult to pull the plug farther down the road.

But if you feel the time has come to crack down on unnecessary spending, here are actions worth taking:

Improve the process of tracking expenditures. Businesses that fail to monitor spending often later find areas of waste and overspending that could have been avoided. With a plethora of cloud-based expense tracking apps to choose from, there are plenty of opportunities to strengthen existing processes and eliminate areas of excess spending as soon as possible.

Crack down on paper costs. If your business still spends money on paper products, it’s well past time to shift to digital technology. Virtually overnight, you can cut printing and storage costs dramatically. Scan important documents and email them to clients and suppliers, rather than incurring costs related to personal deliveries.

Eliminate unproductive meetings. Most businesses are susceptible to meetings “that waste everyone’s time and lack any viable ROI.” Think of the money you can save by holding only productive, actionable meetings. This frees up your team to engage in other, more focused (and often revenue-generating) activities.

Analyze the purpose behind every business trip. Back in the day, it was considered necessary to travel throughout nationally or internationally in order to maintain solid working relationships with clients. While this remains true to some extent, in fact, many businesses no longer feel compelled to show up in person at every industry conference, trade show or overnight client presentation. Digital and video technology make steady contact easier than ever—often at a fraction of the cost.

Hone your negotiating skills. For all the needs of your workplace—from leased office space to purchasing supplies and equipment—it’s vital you get the most for your money. If your negotiating skills aren’t up to par, it’s possible you’re paying more to vendors for their products and services than is absolutely necessary.

Be on the lookout for ways to negotiate volume discounts, for example. Armed with information about much you regularly spend with current vendors—and what competing vendors might charge for similar products and services—you can negotiate ways of “aggregating purchases to achieve savings in volume.”

Explore options to outsource technology functions. Businesses can opt to purchase the most costly, up-to-date equipment to support their operations, but they don’t have to. Technology and software isn’t cheap and often entails further expenses in terms of technical support personnel and/or server administrators. Outsourcing IT services offers potentially significant financial and operational advantages, such as:

  • Decreased staffing costsAccess to data applications without paying license expenses
  • Opportunities to focus the internal IT staff on large infrastructure initiatives, rather than day-to-day desktop glitches
  • No need to constantly update IT equipment, a responsibility assumed by the third-party service provider

Outsourcing IT functions isn’t the perfect choice for every organization, but it’s a flexible, cost-effective option worth considering.

Encourage submission of cost-saving ideas from your employees. When leadership makes clear how important it is to reduce unnecessary spending—in order to continue making a profit and paying the workforce—employees feel incentivized to look for cost-cutting measures on their own. With your encouragement, they may come up with creative suggestions to consolidate current expenditures and other money-saving ideas well worth implementing. It’s up to you to communicate this organization-wide priority and reward the best cost-saving suggestions.

Want to learn more about sales management and training? Find out if a TAB Board is right for you!

 

Could Business Owners Be Doing More to Protect Themselves from Cyber Crime, New Survey Says “Yes”

In September 2017, The Alternative Board conducted a survey of hundreds of entrepreneurs to find out how cyber security is affecting small businesses in the 21st century. The survey asked questions about the business owner’s past experiences with cyber security, their fears, and the precautionary measures they’re taking against cybercriminals.

According to the results, business owners do express considerable concern regarding the security of their business against cyber attacks. In fact, 62% of the business owners surveyed agree “cybersecurity breaches can cripple any business.”

Despite this concern, it seems business owners aren’t taking enough precautionary measures. According to the results, nearly half of all CEOs have faced some form of cyber crime, yet less than half feel 100% prepared against them.

Today’s blog post seeks to reveal where business owners are falling short in terms of cybersecurity and how they can remedy those gaps.

  1. Business owners are spending on average $8,933 a year on cyber protection.

    According to a 2016 study from Small Business Trends, 60% of small businesses that faced a security breach went out of business within six months. Even more frightening, the aftermath of such attacks amounted to approximately $879,582 worth of damages.

    Needless to say, $8,933 seems like a very small investment when compared to nearly $900,000. Considering 31% of the entrepreneurs surveyed are committing a minimum of $10,000 to cybersecurity – it’s important to ask yourself, “Is your small business spending enough?”

    To answer your question, Techvera offers up the following strategy: “Overall, businesses seem to spend between 4-6% of their revenue on IT, and this range is recommended by CIO Magazine.”

    Take a look at your IT spending and see if it’s hitting or missing the mark. Considering 24% of business owners don’t feel any less vulnerable to cyber attacks than other business owners, this can at least provide the assurance that you’re on the same page.

  2. Business owners are using time as an excuse to avoid securing their businesses.

    When asked how safe they consider their business from cyber-threats and cyber-attacks, only 5% of the entrepreneurs surveyed said 100%. Yet, 40% still do not have a cybersecurity response plan in place. Why?

    The majority of business owners agree the number one obstacle in the way of fully committing to cybersecurity best practices is time (43%), followed by resources (32%), expertise (30%), and capital (29%).

    Time should never be an excuse for getting done what needs to get done for your business. As a business owner, if you are not able to prioritize the items you consider important for your profitability and long term success, there’s a good chance you’re getting yourself too involved in day-to-day operations and not properly outsourcing.

    In fact, 39% of the business owners surveyed believe that they are responsible for cyber security for their business, when that could easily be outsourced to an IT firm or consultant. “Although information security is a stressful matter, consulting with a professional IT services firm instead of trying to handle things in house is a smart move,” says security expert Danielle Valliere.

  3. Only 23% of Entrepreneurs consider themselves likely to purchase cybersecurity insurance in the next year.

    75% of business owners agree a cyber attack would affect the profitability of their business for some period of time, but less than a quarter are investing in insurance against it.

    According to QuickBooks Resource Center, “In truth, anyone that hosts a website that interacts with the public at large is a candidate for cyber liability insurance. This includes commercial businesses and website publishers. If you conduct even a portion of your business online or ask customers to trust you or a third-party vendor with their information, you should seriously consider purchasing cyber insurance.”

If you count yourself among the 95% of business owners who don’t feel 100% satisfied with your current cybersecurity protection plan, than you may want to consider increasing your budget, outsourcing relevant tasks, and investing in insurance. Developing a cyber security protection and response plan is one of the many topics you can discuss with a board of fellow business owners through The Alternative Board.

Get in touch with a local TAB franchise if you are interested in discussing cyber security or any other business topics with an advisory board, comprised of business owners just like you.