9 Things Most New Small Businesses Should Not Spend Money On
By: Taylor Bartley
You finally did it! You are opening your own small business and are ready to take over the world. You have funds to work with, and you have heard many people say that you have to spend money to make money. Although there is some truth to that, it is not always the best advice. Spending money on the right things are considered investments. A business plan, technical support, tax and legal professionals, and basic marketing and business needs (business cards, market research, etc.) are examples of where your dollars are being put to good use. When you start off spending money on unnecessary items, you end up being incredibly overwhelmed with your finances.
We have seen countless startups and businesses of all shapes and sizes come through our doors, which means we see what does and doesn’t work when running a business. Keep in mind that every business is different, but the following items are usually unnecessary for most small businesses.
1. Everything bought brand new
When you are first starting off and settling into your work space, you don’t always have to buy things brand new. Used office desks can be found just about anywhere. Also, don’t spring for the expensive notebooks and writing utensils; the cheaper versions will work just as well.
2. Subscription-based services
Subscription-based software for CRM, marketing, email and more may seem like your saving grace, but first make sure you are going to use it. All of these subscription-based services come with a free version or free trial. We suggest you try it before you buy it!
3. Excessive shipping and mailing costs
Is paying for overpriced postage and expedited shipping really necessary? Waiting the extra day or two to get your package won’t kill you. Also, there are much cheaper options than buying an expensive machine for mailing.
4. Buying customers
This is often the way small businesses go if they are desperate for leads and business. This may seem like the way to go, but try organic ways to build your business first. Digital marketing can benefit you in many ways when done correctly. Grow the right audience for you by tailoring the content you post to the people you want to serve and see what happens. If you are going to pay for anything in this regard, pay for help with your marketing.
5. Too big of an office
If you want your business to be big it has to look big, right? Wrong. Many entrepreneurs and small businesses want their work space to represent the size of the business they want to have. But success does not happen overnight. It takes time to be able to afford your own office building or suite. In the meantime, consider a virtual office, satellite office, small office, coworking space or renting conference room space when needed.
6. Promotional “swag”
This is a common mistake we see time and time again. Ordering 1,000 pens with your business’ name on it seems like a good idea at first, but when your business goes under within two years, it is more of a mockery of your bad business choices. Buying items with your logo on it is not a good idea for new businesses. Wait until your brand and business have been established for a while before you spend money on promo gear.
7. Expensive office machinery
Yes, a reliable computer and printer are likely must-haves for your business. But is a printer that is larger than a 3rd grader necessary? Probably not yet. Remember, just because you have the “smaller” version does not mean you are stuck with it forever. You can always sell it when you are ready to upgrade. Also, opting for the latest and greatest in equipment is not necessary for businesses on a budget. You may think buying a nice, new camera is a good idea, but your phone camera takes great pictures, too. We suggest waiting a few months to see if what you think you need ends up being what you really do need.
8. Custom websites
Small businesses are not expected to have a site unlike anyone has ever seen. Stick to building a site with a template that works well for your industry. There are marketing agencies that can help you find a low-cost but still stunning website.
Dressing for success has some truth to it, but dressing in designer clothing for success isn’t necessary. Getting professional clothing staples is a must, but there’s no need to splurge on high-end brands when it comes to buying your work apparel. We suggest building your professional wardrobe piece by piece (month by month if possible) and finding as many bargains as you can.