5 ways for a company to waste money

For some reason, many companies seem to like wasting money. Even if you point it out, nothing seems to change. Here are some examples:

1. Ignoring customer service - If your customers need to get in touch with you, something is usually wrong. What kind of reception do you want them to get in that case? And do you care? If you do, then you should make sure that all the people you have hired to answer them do as well, and have the training and tools they need to help. Even if they care, but they don’t know how to help the people bringing you money, the money might not be coming in for long or at least not from them. Let’s also not forget the bad PR your unhappy customers will do for you when they tell another 10 people about the bad service they got from your place. Consider how much more it costs to source new customers, compared to keeping the ones you already sourced once, and think if customer service is the right place to save from. A great customer service agent is golden and might be as hard to find as gold. When you do find them, make sure you value them and pay them before someone else smart will. They are worth their weight in gold.

2. Ineffective perks - So you got a pool table and fruit baskets because they seemed like a good idea, and someone gave you a good deal, but does your staff want them? Unless you make sure the company culture keeps people in and you pay them enough, you will need a lot more than a fruit basket to keep your staff. No amount of perks will replace the things you can do for free, and no amount of fruit can replace appreciation, decent remuneration and good work-life balance. My telltale sign of a time to get out used to be the point where I felt that “I don't get paid enough to buy the amount of alcohol I need to cope with work”, and I’m sure that is the case for many others too. Make sure you know why your staff comes to work, if they are able to be happy about a fruit basket you are doing OK.

3. Tools - OK, so you have the back offices, Zoom, something for IM and PM, as well as a mail provider etc. Have you also made sure your staff knows how to use them or how to use them correctly? If they need training, is any available? If they ask their boss about it, will they get help or a grunt and an eye roll? Are all those tools necessary, and are they necessary for everyone who is given access? Is the need re-evaluated later on?

If people keep asking for something (eg. back office) to be fixed or improved, are they heard, and can something be done? There is no point in hiring people to look at the loading screen for half of their workday. It might seem like a minor issue, but the more time people spend waiting, especially when multiplied by tens or hundreds of people, the more time, aka money, you are wasting. Are you sure it won’t be cheaper in the long run to get it fixed and get your staff to spend their time on something productive?

Company plans don’t come cheap, so it also makes sense to make sure the tools are used and worth the money. Sometimes a little imagination can get you a lot further than a good sales pitch.

4. Leaking money - I once moved to a house that had been fully renovated after the previous people from the building left. However, there was a constant flood of letters from a leading energy provider for the previous tenants, and it went on for more than 18 months. I tried sending the letters back to them with notes, but more just kept coming. They sent someone who worked for the company to ring the doorbell twice during that time as well, and when I told them they didn’t need to get there, the reply was along the lines of “I can pass on the information but doubt it will have much effect” (and it didn’t). So, the lesson from this is that the waste of money on admin, postage and sending staff to places when there is no need can also cost you future customers (in this case me) before they even become a customer. If you don‘t even bother to get the basics right, what else is going on in the company?

5. Paying people not to work instead of the ones who do - I’m sure we have all read too many times the story of a CEO turning a profitable company into a very unprofitable one and then getting millions as a payout to leave as a thank you. If that is not a waste of money, I don’t know what is.