5 Ways You May Be Wasting Money in Your Business

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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When it comes to small business and money management, are you wasting money or using your resources wisely?

You might be wasting money if you have...

• A stellar website with no conversion funnel.
• A star sales guy who's bogged down with meetings and red tape.
• An outdated product line you won't give up on.
• A leadership style that makes trying a new idea impossible.
• A bloated system that makes routine tasks far too complex.

All of these issues are costing you money, either in charges you could avoid or in profits you could be making.

1. A Bait with No Hook

That great website you have, for example: you paid a professional design team to build it. You pay to host it. You pay for somebody to put new content on it (you are putting fresh content on it, right?). Maybe you're paying to get an SEO professional to tweak your website, or you're buying stacks of Google ads to get the traffic to your home page.

But do your visitors know where to go once they get there?

A stellar website with no conversion funnel is like bait with no hook. You aren't going to catch any fish.

2. Stuck Employees and Weak Teams

What about your employees? These people are the backbone of your business, but if you squelch their natural talents, ignore their strengths, and manage them poorly, they will lose all desire to help you succeed.

Who do you have on your team? Do you have a guy who's a little out there, or a gal who's rather hard to manage? Maybe he has great people skills but stinks at time management. Maybe she excels at managing herself but doesn't like being told what to do.

What can you do to put these people in a place where their strengths matter and their weaknesses don't?

Play to Their Strengths

Put your employees in places where their strengths matter and their weaknesses don't. Give your star sales guy the support he needs to stay on schedule, or give him the freedom to do things on his own time line by providing money-oriented goals rather than time-oriented tasks.

An employee working in areas of strength will bring in more profit than an employee struggling daily to conquer weaknesses.

3. Outdated Products or Poor Marketing

Your products need the same analysis. Are they selling? If not, why not? Is the problem in the marketing or in the product itself? Do they need to be repackaged, or is the whole product line simply outdated?

Don't be afraid to let go of what isn't working; that's the only way you'll find out what will work.

4. Resistance to New Ideas

A fear of new ideas—and a leadership style that squelches them automatically—will cost you in terms of innovation that could improve your products, services, company image, processes, systems, and customer service.

5. Consider the System

So, next time you're faced with a new idea, take your time and consider it. And next time you find yourself spending twenty minutes to do a task that should take two, consider the system; is it time to make a change?

The value of simplifying systems is that it allows you to focus on what is important. Detail work shouldn't be part of a complex process, but should be streamlined into a simple routine you can get through quickly.

If you're wasting money stupidly, it's not because you're stupid; it's because you're busy in the work of running your business, too busy to stop and consider what you might be losing. But take a moment. Step back, look around, make some changes, and start making money instead of wasting it.