If you have to choose — where do you cut spending, and where should you spend more?
Trying to digest and implement business advice can be like trying to fill a squirt gun from a fire hose. There’s no shortage of information to act on, but it comes at you so fast most of it will be wasted.
Spend more on this! Stop wasting money on that! And so on. So where do you start?
To help get some focus, I asked a number of small-business owners and consultants in a wide range of fields what top costs they would recommend cutting back on, and what top things they would recommend spending more on.
As you can probably guess, they didn’t all agree; some directly contradicted each other. Still, there was a surprising degree of consensus. Read on.
Where to cut costs
1. Traditional marketing channels. “Spend more on the Yellow Pages!” … said none of these people, ever!
Local print advertising and TV and radio ads are all losing their audiences — although if you have concrete evidence to the contrary for your business, you might have reason to set aside this advice.
The bottom line, says William Schroeder, co-director of www.justmind.org, an Austin, Texas, therapy clinic, whose original degree is in marketing: Get a clear picture of how people really are finding out about your service, then focus your dollars on those channels.
“Social media is easy and cheap for an owner to keep updated,” he says
2. Paper and paperwork. There are many ways you can significantly reduce your paperwork.
“There is really little reason to use paper anymore,” says Kelly Fallis, CEO of Remote Stylist, an online furniture seller. Electronic signing, credit card swipe gadgets that attach to mobile phones or tablets, and vast storage capacity on the Web (or, if you don’t trust the Internet, on a server that takes up just a few inches of shelf space in the office) all combine to eliminate the need for paper in most day-to-day business use.
Where to spend more
1. Tailored marketing. Your business still needs marketing of some kind. Rather than only focusing on your local hometown advertiser, broaden your efforts to include search engine ads, ads on review sites like Yelp!, and social media such as Facebook and Twitter.
Don’t assume that one size fits all — for you, or for your customer base. That also means, don’t just blithely throw money in any direction.
Instead, take some time to explore your options and see which ones best fit your community and your customer base. You might find that Yelp! isn’t that popular in your area, but another review site is. Or that Google Plus has outstripped Facebook among social media users in your community — or at least among the segment of the population you’re most eager to reach.
Don’t just use your ads to toot your own horn. “Start creating client-specific content,” says James Chalmers, vice president for strategy at Mako Invent, a consumer-product development firm. “Not a sales pitch, but rather information that educates them.”
There’s some dispute over how much attention you should give to “search engine optimization” — SEO for short.
One correspondent points out that SEO formulas change drastically when search engine companies like Google tweak their search algorithms — and send your carefully crafted online promotional material to the bottom of the search lists.
Yet local SEO is important for services that rely mainly on a local customer base. Here the best advice may be to take your time vetting the people who sell you their services. Make sure they really understand not only your business, but their own.
2. Employee quality. Note, I didn’t just stop with “employees.” You’ll be wasting money if you simply hire people but fail to invest in their training, in making your business a satisfying and rewarding place to work, and in giving them the tools they need to do the job right the first time.
“Make sure your staff and teams are taken care of and happy,” says Chalmers. “They are your best sales team, and productive staff people cut costs in the long run.”
3. Professional help where you need it. Unless you have a CPA, a law degree and a human resources management certification on your resume, you can’t do these things all by yourself.
Sure, you can automate a lot of your bookkeeping operations — and you should. But don’t just rely on Mint.com or QuickBooks any more than you would assume that you can take care of your health and your family’s health by reading Web M.D. or the Mayo Clinic website.
“You also need to pay for people who are good at numbers,” says Haroon Ahmad, head of public relations for JotForm, a tech company that builds business forms online. “You need to pay for an accountant. You might be great in your line of work, but you can easily lose all your money if you don’t have someone who’s good with numbers working your books.”
The same is true for other professional expertise, especially in any aspect of the business that can be affected by local, state or federal laws.
It’s also true for marketing.
“You need to spend your time and effort on doing those things that grow your business,” says Walter Wise, a business strategist and executive coach at BPI Strategy Group. “If you are not good at any of these — and most small-business owners are not — find someone to help you and teach you how to do them.
“You have to market your products and services in such a way that your message resonates with the problems of your target market and ideal customer and convinces them that you are the only one who can solve that problem for them.”
And that will be money well spent.