7 Ways You’re Hurting Your Business by Keeping Costs Low

This article is a guest blog by Alexander Dance.
 

Your business is up and running, and now it’s time for the most difficult part. You must develop it by wisely deciding what is worth spending money on, and what isn’t. Ideally, you want to keep your costs as low as possible. However, you may be damaging the potential for the success of your business by cutting important corners.
 
Here are seven things you should not be afraid to spend some money on now, in order to help your small business grow in the long run.
 

1. Marketing

 
No matter how great the products and services you offer, no one will buy them if they don’t know they exist. A crucial step towards the success of any small business is a solid marketing plan. It should outline the target audience and how you intend to reach them.
 
While it can be tempting to cut costs, lack of marketing will stunt the growth of your business in the long term. In order to increase communication with clients, businesses often like to use low-cost options such as email marketing, web content, and social media.
 
Whenever possible, however, new businesses should aim to hire an experienced digital marketing professional. This is a crucial step for developing a successful business in the digital age.
 

2. Technology

 
It’s a word you won’t hear the end of anytime soon in the world of small businesses. While skipping a few IT upgrades will save you money in the short-term, this too could significantly hurt the progress of your small business.
 


 

Your company, like most others, likely relies on the web to find and reach customers, as well as relevant professionals and partners. Excessively restricting your tech budget can lead to slow internet speeds and higher risk of security breaches. Neither of these are desirable for an ambitious business in the digital age.
 

3. Your Website

 
Having an excellently built website is more than desirable. While it doesn’t need to contain a Bible’s equivalent of dense content, it should look good, work well, and provide useful information. User-friendliness and functionality are crucial.
 
When determining your website-building budget, keep in mind how important it is to make a strong first impression. Most businesses will hire professionals to build and update their websites for this reason.
 

4. Insurance

 
Business insurance is not an item worth scrapping from the budget either. Even though no one wants to think about an unfortunate event affecting their small business, everybody wants to be protected when issues arise.
 
Insurance will protect your small business in a wide variety of situations. These include robbery, fire, and lawsuits, as well as product and customer liabilities and the actions of employees. Investing in insurance will protect both your business and the people that work hard to keep it functioning in case of difficulty.
 

5. Accounting

 
It may seem contradictory, but paying for a licensed bookkeeper to handle your finances can save you a significant amount of money. A professional accountant will prevent and correct financial mistakes that could potentially cost you a lot. Additionally, they should ensure that you take advantage of any beneficial tax breaks.
 


 

On top of all of that, if your accountant is dealing with your budgeting, employee salaries, and financial admin, this frees up time for you to deal with growing your business.
 

6. Product Quality

 
It’s obvious, but we’ll say it again: don’t ever skimp on the quality of your products and services! It is tempting to spend less on products when you’ve just set up your business and profit margins are low. However, this strategy can damage your company’s reputation in lasting ways – and potentially forever.
 
Review websites like Google and Yelp can be either very beneficial or very harmful for small businesses. Ensure that your customers express satisfaction, creating a solid basis for your company to grow upon. Don’t let higher profits in the short run outweigh building a strong customer base.
 
Also, consider how you will look to potential investors if you produce inferior products. Like customers, they will be put off by sub-par products and services, and will be unlikely to want to work with you.
 

7. Service Quality

 
Similarly, consider your company’s responsiveness to the concerns of customers. Should anyone be unhappy with a product or service, the way you deal with their complaint goes a long way. Re-establish good rapport by responding quickly and respectfully.
 
Remember, there is a lot more to quality than just creating a good product. How your customers perceive your business is affected by marketing, company image, and services, not just the quality of the goods it produces and/or sells. Successful businesses spend money on all of these factors for a reason.
 
 

Alexander writes about the effective habits that make up a happy and healthy lifestyle. He is the owner and writer at Biz Think Tank.