Save More By Spending: The Oxymoron Which Could Save Your Company
There isn’t an entrepreneur out there who doesn’t want to save their business money wherever possible. The money saving attitude is the only one which will ensure you get far. Otherwise, you’ll soon find yourself in trouble. For proof, consider that 80% of startups fail in their first year. And, lack of money is a leading cause for failure. While an inability to produce sales plays a part, running out of funds is high on the list. So, you’ll want to eek out every last penny. And, for the most part, that’s the best way forward.
In some cases, though, cutting costs could mean money lost down the line. Some things may sound like a bargain, but they’re false economy. Most of us know this in our everyday lives. That’s why we all avoid buying the cheapest kettles, for example. You’d have to replace them so often that you’d end up paying more. Yet, few of us apply this way of thinking to business.
To set yourself up with the best chance, pay attention to the problem. Here are some areas where cutting costs could end in trouble.
Cheap product materials
Product materials are a cause of real worry for business owners. In this competitive market, you need to find ways to beat the prices you’re up against. But, if you do this at the cost of quality, you’ll be hit hard in two ways. For one, customers will want their money back, plus compensation if things fall apart. Not to mention that you’ll gain a bad reputation, and lose business.
So, next time you think about cutting material costs, think again. Instead, try to get the best deals on good-quality stuff. That way, you can charge less, and be sure your products last.
You may also want to save on your workplace. When you don’t have much to play with, spending top dollar on fencing and office furniture won’t be a priority. But, remember the kettle analogy. Cheap fence materials will rot and need replacing. Instead of facing the added cost, check out VarnerPipe.com and other companies like them who offer quality steel you can rely on. Think, too, about spending some more on your furniture options. You don’t have to go all out with this, but increasing the price by even a small fraction will ensure things last. It may also be worth looking out for items which come with a warranty, just in case.
Last, but most definitely not least, trying to cut prices on staff wages is always a major mistake. Your employees are crucial to the earnings of your company. By only offering minimum wage, you’ll fail to attract the right applicants. Those with experience and skill simply won’t accept such low pay. Nor should they have to. Even if you do manage to bag a good team, you’ll struggle to keep them unless you increase pay rates. In many ways, it’s better to take on less staff with higher wages instead.