Hi guys, I am back. So today as is evident by the title I would like to talk to you about leaks in your finances. Whether it is in your business or in your personal life.
What is a leak?
A leak is any expense that is not necessary. Now persons tend to think of large unnecessary expenses, however, even the smallest consistent expense can eventual sink your boat (think Titanic and the iceberg). What am I talking about? let’s assume that each day you spend $1,000.00 on lunch when $500 could suffice, for the week that is an extra $2,500, for the year that is $120,000.00. Better yet, allow your tap to drip for a day and set a bucket under it, you would be surprised how fast that bucket is filled.
For the purpose of this article, I will focus on common leakage in small business
Hiring a new employee costs time and money. When you get a new employee they have to be trained and it takes time for them to master the learning curve, it is therefore in your company’s interest to ensure that once train you retain them. Another issue companies’ face is retaining non-performing employees out of loyalty. This might sound cold and heartless but your first loyalty is to your business. If an employee is not contributing his/her fair share and refuse to step up then you owe it to your business and the rest of performing employees to dismiss that individual
Recurring service charges can add up to a tidy sum if left unchecked. ensure the company subscriptions are current; meaning that you only have subscriptions that are necessary and being used regularly. For example, If you have a small consultancy business maybe wave accounting which is free is more beneficial to you than QuickBooks that has to be paid for. If you are located in Jamaica Bank fees are the killer. Ensure you are aware of the cost to do business with your service provider.
You should also make it a habit of comparing fees charged by your financial institution. What are you paying in monthly banking fees, and can you find a better banking relationship somewhere else? If you find that you can, make a call to your current bank’s manager and ask for the same terms that you can get somewhere else. You may be able to negotiate a better deal without having to switch your account.
Watch your late fees and interest charges, too. These can add up to huge costs if you’re not careful. Obviously, you can’t always avoid interest on inventory payments and the like, but there’s absolutely no sense in losing money on a late fee just because you forgot to pay a bill. Schedule your payments, check your accounts regularly, and pay your bills before they’re due. If you know you won’t be able to pay by the due date, call and ask for an extension.
There is a cost to being disorganized. As a matter of fact, I have a personal motto ” If you are disorganized for success you are organized for failure. Many unproductive hours are spent looking for stuff or deciding what will be done first. Schedule three days during a slow week to get your office into shape, including labels for where everything goes. Be aggressive about maintaining the new regime until it becomes a habit for your whole crew. Schedule your time each morning. Personal productivity relies on knowing what you’ll do and when you’ll be doing it.
Don’t sweat the small stuff, but don’t spend too much on it, either. Little expenses, office supplies, uniforms, morning coffee for the staff can add up. This doesn’t mean you should cut out all the extras, just be aware of what you spend, make sure you shop around for the best prices and don’t purchase things that aren’t needed or used.
Internet and phone service
Compare your Internet and phone service. You may find that you’ll save money by cutting off that business line and getting company cell phones, or vice versa. It’s not just about the cost, however. It’s about what best meets the day-to-day working needs. Remember, those services are also businesses and they want (and need) your business. Let them earn it. If they’re not willing to at least talk about a better price, a better deal, or a better contract, go talk to their competitors.