5 Things You Can’t Afford to Be Frugal With in Business
When it comes to running a business, any experienced entrepreneur will tell you just how important it is to consistently pay attention to maintaining a positive cash flow. Cutting costs where you can and saving as much money as possible can help to maximize your profits over time and lead to a more successful business with many assets. And you can better determine where to cut your costs if you run a conjoint experiment to decide the different pricing levels suitable for your offered service or good
However, whilst cutting costs is certainly an important part of business success, there are several areas of your business where being frugal can actually have the opposite effect. Some things are just far too important not to invest as much money, time, and effort as you can into if you want to achieve business success. But the challenge is, how do you know where it’s wise to cut costs, and where it’s worth spending a little more for a higher return on investment in the future? We’ve listed some of the main business areas where it’s worth spending the money.
When it comes to protecting your business, never skimp on your insurance policies. All it takes is one bad lawsuit for your company to be wiped out and left struggling to get back to where it was before. No matter how hard you try, sometimes a lawsuit can be unavoidable. Accidents happen, and never assume that customers won’t sue your company if they have a fall in your retail store or accidentally hurt themselves on a product that they purchased from you. If you’re hiring employees, make sure that you have employees liability insurance, too – accidents in the workplace or illnesses that occur as a result of work can prove very costly for you. If you’re a contractor who works in your customers’ homes, it’s even more important to be covered by insurance for independent contractors for any accidental damage that you might cause.
Your employees are the backbone of your company and as your brand begins to grow, it’s likely going to become apparent that you simply won’t be able to meet your goals and objectives without them. Because of this, it’s a wise idea to never be cheap when it comes to paying your employees, providing them with benefits, and motivating them to work well. Statistics from several studies, surveys, focus groups and observations show that employees who feel that they are valued and invested in at work are more likely to be satisfied in their jobs, leading to higher levels of productivity and loyalty – both of which you need in abundance if you want your business to be propelled towards success. Plus if your employees are happy that means they are going to treat your customers well, and we all know how important customer satisfaction is when running a business!
Although there are many ways to save money when it comes to marketing your brand, being too frugal in this aspect could mean that you’re not reaching as wide of an audience as you could be. As a result, your business could be getting fewer customers than it should and growth could prove to be slow. Of all the business processes and strategies, marketing is one that will directly lead to your company gaining a larger reach and a bigger, better reputation for itself. Whilst it’s great to take advantage of all the free and inexpensive marketing channels available to you, invest in some costlier methods too – chances are it’ll pay off handsomely.
Don’t forget to invest in yourself, too. As a business owner, you are probably committed 100% to your company and building your brand, but don’t let this lead to neglecting your own needs. This is especially true when it comes to medical needs – don’t put off going to the doctor or dentist, for example, in order to save money that you can invest in your business instead. After all, you are not going to be much use to your company if you are in pain a lot! Looking after yourself is key to being a successful business owner. And, your time is one of the most important things that you can invest in yourself. Don’t forget to take time to relax, unwind, take a break from the stress of being a business owner, and simply do something that you enjoy from time to time.
#5. Technology and Equipment:
Depending on the type of business that you’re running, you probably need some equipment or technology items to help you with the day to day tasks. How much you need will, of course, depend on your industry and the type of service or product that you offer; for example, a web or graphic design company is going to need a lot more tech than a restaurant. However, whatever equipment or technology you need, be sure to invest in high-quality options. Spending too little could lead to problems in the future, costing you more when equipment needs to be repaired or replaced early on.
If you found these tips helpful, we’d love to hear from you in the comments!