The definition of “waste” varies in business, in accordance with the sector it is in and the principles that the people in charge of the business believe in. Inexperienced entrepreneurs, on the other hand, often end up wasting money when they are just starting out, simply on account of the fact that they don’t know better yet.
To avoid that steep learning curve, which can essentially ruin your chances of success, read on as we discuss a few of the most financial mistakes that budding entrepreneurs end up making.
Investing in Disproportionate SaaS Plans
Automation, marketing, accounting, CRM systems, etc. are all necessary elements of modern business. Unfortunately, new entrants end up with the wrong plans from the wrong providers far too often.
A start-up needs many of the same services that a large MNC will need, however, the difference in scale is what accounts for the difference in cost as well. Reassess all your SaaS services and plans to see if they are way too expensive in proportion to what you need them for.
For example, having a dedicated server to cater to your business’s hosting needs might seem like the best option, but it most likely isn’t. Unless you can justify the financial expenses of renting a private server and maintaining it, it’s a waste of money. An independent VPS might be more suited to a start-up’s needs, without costing nearly as much.
The general idea here is to make sure the SaaS plans that your company has been subscribed to are not charging the business for features or resources that it simply does not have any use for yet.
Now, does this mean cutting out SaaS services completely? Not really, it is about finding the right balance. Look for software and apps that do more than one job. SaaS can be quite comprehensive, and it a matter of weighing the scales to see if you get more out of it as a start-up or not. You can see this in action with contract management systems. What is contract management? Contract management is about managing your different deals between suppliers, investors, and clients. Contract management systems can have a vendor management feature which allows you to get data you need to finetune your setup. You can assess your third-party relationships and prevent unnecessary risk. By monitoring the quality of their service, you can save money by being conservative with inventory expenses and stock levels. Reducing risk, increasing your profit, and creating a system that streamlines your process are benefits that can help start-ups early on in their business. In this case, a SaaS service does more good than harm. Avoid disproportionate plans, but don’t discount it altogether.
Paying More for Energy and Gas Than You Have to
Smaller businesses led by somewhat inexperienced leaders often pay more for their business gas and energy supplies than they need to. It’s a very common mistake that most inexperienced entrepreneurs are guilty of, unfortunately. The truth is that whether you have launched a manufacturing facility or a food business, companies of all size have the opportunity to negotiate with their business gas and electricity suppliers to get a better rate. Unless you have already done that, the business is losing money that it really did not have to lose.
To solve this problem, use a site like Utility Bidder, which provides a platform for start-ups to get quotes from the best energy and gas suppliers operating in their respective areas of business, so that they can compare all of them in one place to find the best possible option. You can even choose from suppliers like Haven Power who pride themselves on supplying innovative renewable energy.
Renting a Bigger Space than Necessary
Given how high business rent can be in the major British cities, you should put in extra effort to make sure you are not paying more rent than you need to by taking up a space which is just way too big to be considered a justifiable investment.
Some start-ups have completely sacrificed physical office space in favour of a virtual office, where the employees remain interconnected with the system from anywhere they want. Of course, not every kind of business can afford to do that, because restaurants, manufacturing units, etc. really do need physical space to operate!
In case you couldn’t identify your own investments and policies with anything that was just discussed, you are already ahead of the curve. Those that could relate on some of them at least, should take whatever measures they can to mitigate the financial waste as soon as possible.