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How South African Small Businesses Waste Money
I've been helping businesses of all sizes improve their marketing and more often than not, im approached in dire straights. The company needs traffic and leads to survive, and I often wondered why business owners would let it get this far before taking action. There are many ways in which the companies waste money, and nearly every small business has superfluous expenses that make them less efficient.
Though they may seem small, these costs add up over time, and every penny counts for small businesses trying to survive in this dismal economy. Small unneeded expenses are what could push a business over the edge from profit to loss, so they need to be monitored.
In a bid to help local entrepreneurs slim down their business as Jonah Hill does from time to time, I've created a list of the top 5 spending sins and how to correct them.
1. Marketing Incorrectly
Marketing doesn't come naturally to many business owners and with the speed of innovation in the space, it has become a very difficult task to master. It’s quite a risky aspect of the business, which not everyone may realize at first.
To those who are new to marketing, there is a common misconception that more money spent means more leads, more sales and more profit. While this may be true when starting from zero you will soon hit a brick wall and find that this rule is definitely not the case. You will soon find that the success of your marketing lies in your offering, your communication the quality of products you are selling, your target market.
Certain types of marketing will be more effective for one business than another. Your target market may appear a lot more on one type of media than another. So instead of going for the most expensive option, you need to work out which will be the most effective first and double down on that channel before moving on to other forms of marketing.
If you're looking to improve your marketing and reduce costs then check out these articles.
- 8 Ways Small Businesses Waste Money Marketing
- How To Take Advantage of Digital Marketing For Free
- How To Get Local Customers With Online Marketing In South Africa
2. Not doing tasks in-house
Spending tens of thousands of on outsourced projects or freelancers can seem like a good idea at first but this needs to be managed if you want it to remain effective. If such a project is ongoing or recurring, consider taking on a part- or full-time staff member to absorb the duties or try to take some of the tasks on hand yourself. Not only will the new hire be hand-picked by company management, but he or she will also be completely available to do work for your company instead of splitting time between multiple clients.
If you are planning to use freelancers for certain tasks, then here is how to find local freelancers.
3. Too much technology
The allure of technology today for business owners is unrelenting. Social lives happen on the Internet. Smartphones keep everyone tuned in, even when we're off the clock. So it makes sense to invest in tech tools to help you business match that trend, right? Well, sort of. If you're investing in software for its own sake, that's obviously taking it too far. Consider what you really need and whether the operation cost of certain software yields a significant benefit.
For example, if you're spending thousands on tools to maintain simple records or . compelte certain tasks that are better sutied for scale you may want to evaluate if its really necessary at this point for your business.
If you're looking to reduce costs on tech tools, I recommend you check out these articles.
- 5 Free Email Suite Options
- Free Project Management Tools For Small Businesses
- 10 Free Survey Tools For Small Businesses
- Free Digital Tools For Small Businesses and Startups
- 9 Free Marketing Automation Tools For Small Businesses
4. Not cutting the fat
Large companies can probably absorb a few underperformers for the good of the collective but small businesses do not have that kind of luxuary. When every employee needs to accomplish his or her tasks to keep the business moving forward -- and all this on a tight budget -- workers who don't contribute can quickly become a huge liablity for the company.
A growing business does not have space, or cash, for the unmotivated staff or those who are simply in it to collect their monthly salary and should be cut loose as soon as possible.
5. Not tracking expenses
Small business owners who think they're too busy to keep track of expenses should think again. By not paying enough mind to what gets spent, companies could wind up with less than expected when the final tally comes through. Plus, if business managers don't know how much they've been spending on standard supplies and services, vendors could hike up their rates without raising any concern -- a hidden cost of not paying attention. By paying close attention to everything you're spending and what you're spending it on, you can save yourself a ton of trouble -- and money. How will you know if you're overspending if you don't have the numbers?
Optimising your resources
Marketing is not the only answer to a business's cash flow worries, and while it is essential, it's often too easy to look outward instead of inward. I often encourage business owners to look at scaling back and finding an equilibrium where marketing costs factored into their burn rate.
Tell us your small business story
Have you been frustrated with your small business? How did you or the company overcome it? Are there any tips you would like to share on reducing business expenses and practicing a lean methodology? Share it with us in the comments.
Are you looking to promote your business?
Business owners can create your free business listing on nichemarket. The more information you provide about your business, the easier it will be for your customers to find you online. Registering with nichemarket is easy; all you will need to do is head over to our sign up form and follow the instructions.
If you require a more detailed guide on how to create your profile or your listing, then we highly recommend you check out the following articles.
If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on SME's.