Avoid These 6 Costly Business Errors

The end of the year is a good time to assess where you stand with your profits and expenses and if there are any problems affecting your bottom line that can be remedied

Interested in Business?

Get Business articles, news and videos right in your inbox! Sign up now.

Business + Get Alerts

Nobody likes to waste money, least of all small-business owners.

As the end of the year approaches, and as business owners take a long, hard look at their profits and expenditures over the past 12 months, it may be helpful to identify instances of undisciplined spending. Consider some of the most common and costly errors that impact companies.

1) Hiring more employees than you need.

This first one can be tricky. You don’t want to overburden your current employees or stretch them too thin. Sometimes, hiring is the right way forward.

But other times, it’s just not necessary. If your payroll sags under the weight of employees who aren’t adding much to the bottom line, or whose services could easily be handed off to third-party or freelance vendors (think virtual assistants), then it may be time for a hiring freeze.

2) Spending on technology you don’t need.

It’s always fun to get new toys, but there’s no point in breaking the bank over items that won’t make a discernible difference in your bottom line. For instance, why pay big bucks for a social media automation platform when you really just need to post the occasional update on Facebook, which can be done manually at no cost?

3) Neglecting customer loyalty.

Bringing in new customers is absolutely essential, but it can also be quite costly. By contrast, nurturing your current customer list can be a much easier way to generate recurring revenues. Make sure your marketing investment isn’t solely focused on new leads. Something as simple as an email news blast can help keep your company top of mind among previous customers.

4) Underpricing your services.

Maybe your whole brand identity is wrapped up in being the “discount” option. That’s not necessarily a bad thing assuming you’re still able to realize some profit. But it’s very possible that you’re losing money because you’re not pricing your services in a way that’s consistent with the value you provide. If you’re doing top-of-the-line work that offers lasting value to your customers, don’t be afraid to charge a fair rate.

5) Trying to be all things to all people.

Some companies spread themselves a bit too thin, trying to offer an endless range of services rather than finding their niche. There’s something to be said for versatility, but there’s also a point at which the jack-of-all-trades mentality means you’re diluting your value.

6) Not planning for the future.

Are you burning out on 80-hour work weeks? Don’t normalize it. Instead, start planning ways you can scale your company, not only boosting profits but also more evenly distributing the workload. If you don’t plan for the future of your business, you may not have one.

Even the most judicious business owners can make seemingly small errors with big, costly ramifications. Be sure you take the time to identify any of these errors within your business and course correct as we head into the new year.

About the Author

Amanda E. Clark is the president and editor-in-chief of Grammar Chic, a full-service professional writing company. She is a published ghostwriter and editor, and she's currently under contract with literary agencies in Malibu, California and Dublin. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects; often engages in content and social media marketing; and drafts resumes, press releases, web content, marketing materials and ghostwritten creative pieces. Contact Clark at www.grammarchic.net.


Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.