One of the hardest things to do when running a small business is determining when to spend money and when to save money. As the old adage says, you can’t make money unless you spend money. On the other hand, spending too much on something that doesn’t result in a return on that investment can bankrupt the company. How do you decide when to spend and when to save your cash?
You Get What You Pay For
The most important thing to understand as a small business owner or a consumer in general is that you get what you pay for. For example, you could spend $5 for a 500-word blog post that goes on your corporate website. However, it will probably be a generic piece that won’t lead to any shares, likes or conversions. The best move is to spend $100 on that same post on a writer who can create quality copy that you can use and reuse for years to come.
Dropshipping Can Save on Inventory Costs
Dropshipping means that you take orders on your website and have another company ship the goods for you. As you create the goods on demand, you never have to store them in a warehouse. This means that you save money on both inventory and storage costs while still being able to deliver goods to customers in a timely manner. Looking at reviews on drop shipping companies can be helpful when making a decision about who to go with. For instance, reviews for Doba drop shipping can help inform you about drop shipping options available to you. If you have digital goods such as music or written articles, you can simply have your customers download them and pay a small fee per transaction.
Don’t Underpay Your People
You always want to pay your people what they are worth and devote resources to developing them while they work for you. The more you pay your workers, the happier they will be and the more they will produce for you, which will reduce turnover costs. Loyal workers are also better for your brand both now and in the long run. While you may be tempted to classify workers as independent contractors to save on insurance, workers compensation and tax withholding, don’t do so unless they meet the criteria of a contractor.
Share Costs With Others
Sharing costs can be a great way to save money without sacrificing quality. For instance, you could share office space with other companies or lease a portion of an office that the main tenant isn’t using. Working with others can also help you come up with ideas and make connections while you lower your costs. You might also want to look into sharing equipment and labor costs as well if it is something that can be done without compromising your ability to provide quality goods or services.
Use Your Resources Wisely
If you use your resources wisely, there is no reason why you can’t get quality without having to pay for it. Online marketing is one of the best ways to get the word out to your customers without paying too much. For pennies on the dollar compared to television or radio ads, you can advertise on search engines or on websites and reach your target market. Creating groups on sites like Facebook could also help you reach your audience without having to spend a lot of money.
As a small business, you need to spend and invest in your company if you want it to grow in the future. Ideally, the choice won’t be between saving or spending on what you need. Instead, the goal should be to spend as little as possible on the things you need and making sure you can meet your goals without going over your budget.
Author Bio: Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter:@RachelleWilber