There is little more disappointing than seeing a great business idea in the hands of an enthusiastic entrepreneur tank because of overspending. There are many things that would be great for your business if they were free, but spending money that does not translate into revenue can hurt your chances of success and instead drain your precious resources. Here are a few things that most small businesses that are gaining traction really don’t need and too many have:
- Fancy gadgets and technology. Question the efficiency that these things promise. Often times, they only increase efficiency measurably in the hands of large corporations, and they certainly cost a pretty penny! Invest your resources in more relevant areas before putting them into these, as appealing as they may be!
- Too many full-time employees. Keep your employees to a minimum and try to keep your labor costs variable instead of fixed. Most often, it is the person running a business who is the most qualified and motivated to sell its products, especially in the early stages. Look to more salespeople and admin staff only when the business is growing too large for any other option; not because you think it would be useful.
- A high-end website. Unless you depend on eCommerce as your primary source of revenue, a simple yet professional website is all you need. Wait until the rest of your business has grown to roll out the fancy “Version 2.0”
- Too many new products and services. Stick to the solid base you have set up and expand this base before investing in something new. Simplicity is key when building a business and too many new products will leave no room for depth or authentic development.
Simply dropping some of these things and redirecting your resources can be a great way to grow your business. As contradictory as it may seem, many of the things above actually create stress rather than relieve it. When the appropriate time comes for using these things, you will know!
Remember, running a business successfully does not need to be complicated. Keep it simple!
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Manny Skevofilax is a consultant and speaker that helps his clients successfully navigate the challenges of growing their businesses profitably. Since 2003, Manny helps businesses enhance their results by using his experience in strategic planning, financial statement analysis, operations, organizational development, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at manny@portalcfo.com.