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As a business owner, saving money is likely one of your main priorities. After all, with everything from energy use to materials going up in price over the last year or so, a frugal outlook is the only way to offset those costs so that your consumers don’t have to.
Unfortunately, with more and more business owners feeling the squeeze, a few fatal false economies are also creeping in, and they’ve got high price tags attached.
Far from saving you big bucks, these seemingly cost-effective hacks could see you out of pocket in no time. But what are they, and why should you avoid them like the plague?
# 1 – Manufacturing hacks
Manufacturing hacks like changes to your manufacturing materials, or even your processes themselves, might seem like a sure way to save money upfront, but they will inevitably come back to bite you.
Even if you drop your costs a little, it’ll be difficult to perform well with products that will inevitably end up either not fit for purpose, or notably worse than many similar items on the market. Instead, a lot of companies are finding that consumers are willing to pay a bit more for quality right now, so trying to raise your price points by a reasonable amount may be a far better option for keeping consumers onboard.
# 2 – Lacking insurance policies
You may be tempted to cut back on things like insurance extras that you’ve never used. Unfortunately, as soon as you leave a policy, you lose the money you’ve put into it and also leave yourself open to potentially devastating losses.
After all, comprehensive insurance policies may seem like a steep outlay right now, but they make it financially viable for companies to manage things like sickness, workplace accidents, and even legal fees as required. Instead of cutting back, then, you may find that it’s far more effective to work with a company like Tivly to get the insurance you need, at the budget you’ve set. That way, you should be able to save yourself money, and still enjoy the relevant protections.
# 3 – A green team
Green, inexperienced employees can seem like a good financial choice considering that you can pay them the lowest possible wage bracket, while also getting away with less competitive benefits packages.
But green hires are perhaps the worst false economy of all because, when taking on an inexperienced team, you have to weather the additional costs of –
- Training
- Mistakes
- High turnovers
- And more
Ongoing training, alone, will soon outstrip what you would’ve paid to cover a higher salary. Plus, with employee mistakes potentially destroying your reputation, the losses you might face here are unimaginable. By comparison, offering a higher salary for experienced employees can save you on training, keep operations running smoothly, and even lead to the introduction of new ideas and concepts that can significantly maximize your profit in the long run.
Saving money in business is essential, but make sure that your frugality isn’t costing you accidentally by avoiding these three false economies!
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