Doing your best to get your young startup or small business off the ground and on the road toward profitability? In this economic climate, that road can prove to be a bumpy one, especially for those making their first foray into entrepreneurship.
Even for those who have years of business experience under their belt, going in a new direction or starting over from scratch can be equally daunting without a solid financial plan and a detailed list of possible pitfalls.
There are dozens of financial problems that can easily fly under your radar, but some may be hiding in plain sight. Whether you consider them essential elements of a successful business or you simply aren’t tracking your expenses in full, here are three parts of your business you may be surprised aren’t worth their weight when it comes to moving forward.
1. An underqualified staff
While personality, likeability, and eagerness are all extremely important, hiring unqualified people to positions that require a more skilled individual can turn into an anchor for your earnings over time.
While young, eager workers can certainly bridge knowledge gaps quickly, those who require lengthy instruction and investments in internal training courses can be a significant burden on your company wallet, especially if you’re hiring multiple people at once who each require different training.
While some instruction is necessary for almost all new hires, it’s worth it as an employer who may or may not be bootstrapping expenses to wait for the right candidates. Training for a job is one thing, but teaching a skill is a whole different story.
2. Unnecessary office space
Although the stigma of the business office has been engrained into what we envision a business to look like from a cultural standpoint, the idea that every small business or startup needs to immediately invest in a dedicated office couldn’t be further from the truth.
While some businesses require an office depending on the kind of business they do, the monthly costs associated with an office can be immense when every component is listed out. Rent, insurance, internet and phone service, furniture and all the upkeep can turn into a black hole you can avoid completely with a little ingenuity.
If you don’t absolutely need an office, look into the many options available for virtual offices. This software allows you to conduct video conferences, share files, chat, and perform other communal tasks you would normally do in person at a fraction of the cost.
3. Undercharging for your products and service
While startups and small businesses are often forced to take on every client or customer they possibly can when they’re first getting off the ground, it’s important not to let this continue on after you’re stable enough to pick and choose the work that has long-term earning potential.
Undervaluing your service to the point where clients aren’t paying you what it’s worth will ultimately result in a loss for you no matter which way you look at it. If a client is fervent about not being able to afford what you have to offer, it’s not you, it’s them. If they can’t swing the bill, they should be the ones reevaluating their move.
What’s the bottom line? Don’t put blind trust in any of your expenses no matter how essential they may seem at first. As a budding business, you need to keep an extremely watchful eye over your finances at all time. If your accounting task is simply too much for you to handle, we’re here to help.
If you’re looking to outsource your bookkeeping to focus on moving your business forward, contact our start-up accounting and CFO services experts for assistance.