A company takes substantial time to become stable. In the journey of a company, from its very inception, it goes through three main phases. These are the norming, storming and the benchmarking phases. The norming stage is the time where the company tries to slip into the normal business mode. Storming is the phase of rapid improvement, and venturing out into new areas. Benchmarking is when the company sets the bar for contenders in the same industry.
It is not the easiest task in the world to set up a business and go from the norming phase to the benchmarking phase. Different companies take different time to reach this goal and some may not reach there at all. There are many limitations and you need to have strict control on your money. Most of the time, you cannot afford to go overboard, simply because you need to make ends meet. It is either that or sink before the business really has a chance to flourish. Here are four areas in your business where you maybe bleeding money. Pay special attention to these and you would be able to reduce operational costs drastically.
Many start-up companies set up high budgets for marketing. The thing is, unless you have done comprehensive feasibility studies, you are not sure if your product or service will be accepted or not. Going overboard with the marketing budget at this point may prove to be the wrong thing to do. The best approach would be to set up a considerable marketing budget and review it periodically to evaluate its effectiveness.
Employee benefits are another area where you maybe bleeding money unnecessarily. It is certainly fair and well to give your employees their benefits such as health insurance and bonuses. However, at what cost? Given the choice, would you rather stick with making your employees feel good or ensure their future in the company is secured? You should not, however, take away employee benefits without any explanation. Especially if you are a company that has set a high bar. Explain the real situation of the company to your employees and reassure them. Honesty and reassurance works best in situations where you have to do away with such benefits.
All of us need to travel for business at one point or another. This is certainly justifiable and you should compensate for any travel done on behalf of the company. The same goes for entertaining too. At the same time, there are areas that you should keep a tight control upon, especially during hard times. Make a habit of going over all travel and entertaining expenses. Advise your employees to be more careful with their expenditure on the above categories.
Stationary and furniture is an area where you maybe bleeding precious money without even noticing. Everyone would think that to run an office, stationary is essential. Is it really? Do you really need to print all those emails just to show them to another person? Did you really need to buy those fancy beanbags that no one really sits on? Do all employees need two visitor’s chairs in front of their desks? Go through each item and evaluate their value addition. Encourage your employees to go ecofriendly and reduce the amount of paper used.