It is a well-known fact that start-up businesses usually tend to struggle with managing their finances, especially in the beginning. As an SME owner, it can be tempting to take shortcuts when cutting costs to free up your finances for other priorities.
While it is often necessary to reduce expenditure as a start-up business, you must carefully consider the areas in which you decide to reduce costs. This article addresses several costs which start-up owners should not skimp out on.
The Quality of Your Products
SME owners will often be tempted to make changes to the quality of their products if this means reduced costs. While this approach may provide short-term gain in the form of reducing costs, lower quality products can wreak havoc for you company’s reputation, especially in the long-term.
In our global, digitised world, customers are increasingly using the internet to share their experiences and review product purchases online. If you suddenly change the quality of your products, you run the risk of inviting negative customer reviews from sites like Yelp and Google, which can drastically reduce your long-term customer retention rate.
Marketing and Advertising
For start-up businesses still finding their feet, the idea of spending money on things like marketing and advertising can seem an unnecessary expense. However, while it may hurt the company wallet to fork out on such things initially, the investment will pay off in the long-term.
No matter how good your company is, it will not be successful if no one knows about it. That’s where marketing, advertising and brand management comes into play. Of course, initially you may wish to opt for less pricey options such as social media or email advertising, but ideally you should hire an experienced marketing professional to manage your company’s brand awareness.
While it may be difficult to even consider the potential that an accident or disaster could hit your business, it is a reality that business owners need to prepare for. As with the other costs discussed, it may be tempting to neglect insuring your assets for short-term monetary gain.
However, skimping on insurance may be disastrous for your company in the long-run if disaster strikes. We suggest opting for a monthly premium to protect your company from incidents such as robberies, fires or even lawsuits. This way, it will be easier for your company to get up and running again after the dust has settled.
Finally, the last place you should not attempt to cut costs is technology. In our modern, increasingly digitised world, businesses, individuals and indeed customers have come to depend on certain technologies for business purposes.
Ensure you have a high quality internet plan to encourage efficiency and accuracy when it comes to all your business transactions, sales and purchases. This will help you to increase productivity and also to keep your customers satisfied.
Additionally, it is important not to skimp on the maintenance of your website. Invest enough money into the development and maintenance of your website, as this will be one of the first things customers see when they search you up on the net.