There’s been a lot of talk lately in the small business community about “cutting costs”. This always happens toward the end of the year. It’s especially understandable these days, when a lot of business owners are struggling with changes in their market.
Cut waste. Cut unnecessary expenses. Cut systems you’re not using.
DON’T cut investment in your business.
Not all expenses are the same! But many of you think they are. To you, an expense is an expense is an expense. And when it comes to expenses, fewer is better. It’s not overly complicated, but there’s more to it than that.
Unfortunately a lot of biz owners look at money poorly. As in…they look at money like poor pe0ple do. That’s a shame, because you’re creative, motivated, gutsy and talented. You have everything it takes to be successful, so take the next step and learn a bit about the differences between investing and spending.
Spending = expenses that do not yield a return on investment
Investing = expenses that DO yield a return on investment.
I’ve seen you guys (real world stuff…this ain’t made up, hypothetical stuff) flippantly shut down websites you’ve owned for years, that have tons of exposure and incoming links, so you can save $100 a month.
I’ve seen you guys cut marketing campaigns that bring in leads, so you can save some money. Think about that for a second. I talked with a guy last week in a LinkedIn forum about this. He was BRAGGING about how much money he was saving. Unbelievable. How are you going to grow if you don’t invest in your business? Find new ways and creative ways to invest in your business, but don’t stop investing. I know this is a tough market for a lot of you. Sales were down in 2010, maybe they were down in 2009 also.
SOOOO, it’s the time to invest MORE. Not less. If you need to cut expenses, move that in-house server into the cloud. My real estate team just did this, and it gives us the EXACT same performance for several hundred less per month. Cut your mocha lattes if you need to. I wouldn’t recommend it unless it’s truly necessary, but sometimes we need to take extreme measures.
If given the choice between cutting the cleaning service or cutting marketing, a LOT of you choose marketing. For God’s sake, please don’t do that. Take out your own trash. Look at your payroll; are you paying an employee $30k a year to do stuff that doesn’t bring in a return on investment? I’m not going to tell you to drop the empl0yee. I’m going to tell you that it’s YOUR job to get them doing stuff that DOES bring in a return.
Don’t cut marketing when business is slow. Do MORE marketing. If it’s slow for you, it’s slow for others. It’s not time to run in fear. It’s time to grow.