Is your customer always on your mind? Same is with us. We are always curious about what our customers want, what they like, what’s eating them, what their needs are and such. During some of our conversations, we realized small business owners sharing about how they end up wasting money. Apart from helping them out with their finance management, we created a list of money-wasters. Let’s check them out.
#1 Overspending on space
Educated businessmen and naive new entrepreneurs often overbuild, overpay or overspend on buildings, storefronts, rent, lease or renovations, fixtures and signage. Can you find some space to work at home to start with? Or opt for co-working if you have a team size of 15? Is there a way to hire freelancers who work from home anyway? There can be several ways to get your business working without spending a lot on physical space. Yes, it is important but getting your product rolling is all the more.
#2 Legal fees and bribes
Startups or new business owners start out with hiring lawyers and end up paying a hefty amount on just the incorporation of their business. Simply consulting another startup founder in the space, talking to seniors or peers would get you the basic idea of legal paperwork. Hire an experienced accountant and invest on a good accounting software to save some of his time and he would be happy to help you with legal paperwork. Similarly, this is specially true in India where entrepreneurs think there’s no other way to get by without bribe. Do not waste money in bribing babus in government offices. You are ethically promoting a wrong business culture and creating a bribe habit for future entrepreneurs. On the other hand, you are wasting money over registration paper work that the offices are supposed to do anyway. Be firm and refrain from bribes.
#3 Advertising without a clear message
Startup owners think choosing the right advertising medium and producing an attractive ad will get them business. False. It would get you a lot of attention and empty pockets but not necessarily business. Unless your product message and its USP are not correctly spelled out, do no spend on advertising. Such mindless ads eat up a lot of your money with zero ROI. Carry out good research about your customer demographic first, spell out correctly the pain point you are solving, list down the USPs of your product and then create a clear message. Try the message out for free on social media pages and see how it does before shelling out money on an advertising campaign. Also, choose advertising media that can be measured.
# 4 Buying email list or data bases
Another money waster that almost never fetches great ROI is the practice of buying emailing list or data bases. Small business owners must avoid the temptation of buying emailing lists before testing out their product for at least 6 months. Initially, following people up vial Linked-in contacts, personal meetings, small gathering, Skype appointments can be done to reach out. There’s no way to test out the efficiency of a bought database unless you buy it. And more often than not, it turns out to be inefficient.
# 5 Overspending on branding/logos
A meaningful logo takes a lot of thinking, not money.
Similarly, your branding would be best created by your earliest customers. Based on their feedback, misses and fails, you will know what kind of brand personality works for you. Small business owners waste way too much money on hiring people to create some jazzy logos and fancy branding material. Cut this crap at the earliest and save that money in real-time marketing.
Yes, you want an aggressive approach in expanding your business. But such an approach needn’t be expensive. If you want us to help you manage your finances better, do sign up here.