Small business owners are the backbone of the United States. They started with a vision, worked harder than they ever have before to make it happen, and they should be taking pride in their drive and determination. Unfortunately, a staggering number of small businesses fail and, with them, the dreams of their owners.
Most small business failures are due to money management mistakes. Understanding some fairly simple ways that small businesses waste money can help entrepreneurs avoid these pitfalls and increase the likelihood of their own success.
Marketing Mayhem
So, you’ve got a killer logo and hired someone to put together some snazzy looking collateral and a robust website. Now what? The truth is that your brand will be driven by your customers, their experiences with you and your sales. Brands are built, not developed.
Also, small business owners don’t really know how to track the results of their marketing campaigns. Your message will evolve over time, so your collateral materials need to, as well. Don’t order a print run of 5,000 of your new brochure because it looks awesome until you have a solid plan for distribution and a real story to tell.
Investigate cheaper alternatives for getting your message across, including social media, blogs and even simple video blogs that feature your product in a favorable light.
Bells And Whistles
We all like shiny things, but small business owners need to be careful where they invest their precious dollars. Too many people fall for the trappings of having the latest and greatest, when they actually probably don’t need a 3D printer or the latest software packages. Evaluate what you need to get the job done, and stick with it. It’ll be a sign of your success when it’s time to upgrade.
Loosely Watching Dollars
Every dollar out the door is money lost. Yet small business owners often fail to properly track spending. Yes, stopping to buy the staff coffee and donuts for a job well done counts, too. Not that you shouldn’t do those things, but you should be tracking how, where, why and when spending is taking place.
Failure To Negotiate
Small business owners often neglect to ask for better pricing, whether it’s on supplies or utilities. Often, just asking for a better price can yield big savings over time. You need to look at every purchase as an opportunity to save money.
Overstaffing
In a small business environment, it’s highly probable that a person can – and should – wear more than one hat. Owners need to consider what functions they can logically consolidate and create one job from two or even three. Your company should grow over time, and, as it does, you should add only the staff necessary. Payroll is likely to be a small business owner’s largest expense, so watch it like a hawk.
Cutting cost doesn’t mean compromising quality. It means that you’re attempting to build a successful business with a viable product or service that will add value for years to come, it’s important to be especially frugal in the early years.