As any business owner knows, being frugal does pay off. However, that being said, there are sometimes when being frugal is not the answer - there are some things that it pays to invest in. The fact is that saving money in business is key, especially as the majority of all businesses that fail (50 percent within the first five years), do so because of a lack of funds. However, do not let that statistic drive you to cut corners where you shouldn’t do, because, in the end, it is only yourself and your business that you will be hurting.
Of course, there are some corners that it is perfectly fine to cut, it’s just a case of determining what costs it is a good idea to cut and which ones it is better to ensure that you pay. As a business owner, naturally you want to give your business the best chance of success, which is why taking the time to determine which corners you should cut and which you shouldn’t, is important.
Bearing all of that in mind, the question is: when is corner cutting bad and why? Read on for everything that you need to know about why corner cutting in business is not the answer to saving money, as well as the serious impact these steps can sometimes have.
Not investing in adequate insurance
One of the most common mistakes that many business owners make when it comes to attempting to cut costs and save money is failing to invest in adequate insurance. The problem with not having insurance in place is that should something go wrong for your business, such as there being a problem with the premises or an employee gets hurt while at work, you may struggle to cover the costs that come with this. That is why taking out adequate business insurance, including cover for your employees, is so important. After all, the last thing that you want is to be taken to court because an employee injures themselves at work, and not be able to afford to pay the compensation because you don’t have insurance cover in place.
Failing to take training seriously
Far too many business owners think that one of the answers to cutting costs in the workplace is cutting employee training. However, the fact is that employee training is vital for ensuring that your team are kept safe while at work, and understand how to effectively stay safe while using equipment and machinery. By not taking training seriously and failing to make it a priority, you will be putting your team members at risk, which is why training is not a corner you want to cut. The good news is that employee training does not have to be expensive, it can easily be done in-house and kept affordable, it’s just a case of finding the right training option for your business and budget.
Not making health and safety a priority
When it comes to health and safety, it’s important to ensure that you make health and safety a priority, and that you know how to keep your team members safe while they are at work. Because if you don’t take health and safety seriously and ensure that your team members have what they need to stay safe, it can have a huge impact on your business. Particularly as there is more awareness now of health and safety in the workplace than ever before, which means that if an employee sees a health and safety breach, they can report it to a specialist health and safety company like Meissner Associates, and start proceedings against you and your business. That is why, when it comes to how you deal with health and safety at your business premises, it’s so important to ensure that you deal with it in the right way.
Maintenance costs might be extra things to pay, but the fact is they are crucial. When it comes to taking care of the machinery and equipment that you have at your business premises, it is vital that you don’t skip maintenance costs. Because, the fact is, that skipping important maintenance tasks can not only make it more likely that your machinery will break down, but also that accidents will occur while the machinery is being used. That’s why maintenance is so important, as are repairs. The fact is that many business owners who are trying to keep costs low, also choose to fail to schedule repairs as and when they are needed, to cut costs. However, this can have serious repercussions, particularly if broken equipment or machinery is being used.
Buying cut-price equipment
Another faux pas that you do not want to make the mistake of making as a business owner is investing in cut-price equipment. The fact is that reduced price equipment might come cheaper than equipment that is full price, but that doesn’t mean that it will work as well or will be as safe. It is important to understand that when it comes to buying equipment for your business, it’s better to spend a little extra and get equipment that is safe to use, rather than spending less and getting second-rate equipment. If you are going to buy second hand equipment, make sure to ask to see the manufacturer's guidance on how to use it and how to maintain it. Want to check the quality of a piece of machinery? Contact the manufacturer and ask them any questions that you may have - you can also Google them and see what the internet says about them and their products.
As a business owner, you will often be under pressure to cut costs and keep things affordable, and while it is important to ensure that your spending stays on track, what you don’t want to do is cut costs where you shouldn’t do. The fact is cutting costs where you shouldn’t can be detrimental to you and your business, and can have a huge impact on your success as a business owner. So it is important to ensure that you are wise about what you do and don’t spend money on, and always put your employees and their health and safety before anything else, as that is what matters most.