When it comes to spending money on your business, are you more like a consumer grocery shopping on an empty stomach or a desperate 16-year-old working double shifts during the weekends to save up for his first car? If you are guilty of any of the following wasteful spending habits, it is time to rethink how you are handling your company’s finances and commit to frugal spending.
Web sites are certainly a must for any small business, but be careful before you agree to spend thousands of dollars to hire a web designer. Many web designers are skilled at creating attractive, user-friendly sites, but may not necessarily know how to convert traffic to your site into paying customers. Look for designers who have experience in building sales sites.
High Packaging Costs
Consider how much you are on spending on packaging your products. While fancy labels and high-end materials may make your products look more attractive, you could be cutting into your profit margin too much for an unnecessary accessory. Try using a local printer to make full-color stickers – which could potentially cut your packaging costs by 90 percent – and see if your profits are affected by the change. If not, you know you are wasting your money on a label program.
Updated technology can certainly help you operate your business more efficiently, but take the time to research how much your business will benefit before you drop a few hundred dollars for the latest Apple upgrade. On the other hand, do not make the mistake of purchasing used equipment, such as copiers, fax machines, or computers, that may cost you hundreds or thousands of dollars in repair costs.
Setting up a booth at a trade show may seem like an instant way to target clients and make contacts, yet it can cost thousands of dollars and may not yield the results you hope for. Before spending the money, consider other marketing strategies that would cost less and reap greater response. Or, maybe attend the trade show as a guest rather than spend the money on a booth and bring marketing materials to pass out as you meet and greet.
Exposure on a billboard or in a magazine seems like a sure-fire way to reach your target audience. However, advertising on a billboard can cost thousands and ads in magazines can put you several hundred dollars in the hole. If you have taken the time to get to know your target market, you should be able to devise effective bootstrapping methods to get the word out about your products and services. Craft your message and how you deliver that message based on what you know about your target. Where do they shop? What motivates them? What are they concerned about?