Growing a small business is hard work. We start a business because we’re a good lawyer, accountant, CPA, business consultant, chiropractor, website designer, or other professional services provider, but that doesn’t necessarily mean we’re experts at growing a small business. And since we aren’t small business marketing experts, we copy what we see others do, (wrongly) assuming, “If they’re doing it, it must work.” When in fact, much of it doesn’t work at all.
I’ve been a small business Marketing Consultant for seven years and a sales and marketing professional for twenty, here are the biggest mistakes I see small business owners make when it comes to spending money:
- Unnecessary Marketing Materials. Tri-fold brochures or other hand-outs went out in the nineties. For most businesses, a business card that points people to a professional-looking website is all you need. The same goes for promotional products, hold off on the branded pens and mugs until you start making money.
- Yellow pages (YP.com) advertising. Almost no one uses the yellow pages anymore – they use Google. Even with the online version, you’re much better off investing that money in your Search Engine Optimization; make sure your website is SEO friendly, write blogs and build your social media presence. A strong SEO strategy will yield much better results than an expensive Yellow Pages ad.
- Search Engine Marketing (SEM) /Pay Per Click (PPC). To be effective with SEM and PPC you literally need to spend thousands – per month – for at least a year. So unless you have $12k – $24k just laying around, this is a huge waste of money. I’ve worked with a handful of SEM companies that promise amazing results and I have yet to see any of them deliver a positive ROI. It takes A LOT of money and A LOT of time. You are better off investing that money elsewhere.
- Office Space. I saw a Midwifery service set up a storefront downtown once. A Midwifery service- think about that a minute! Some small businesses simply do not need a storefront. Sure, it’s exciting to have your own brick and mortar place to go, with your name on a big sign out front for all the world to see, but don’t let ego lead you to waste a whole bunch of money unnecessarily. Many small businesses and startups can launch in your home. If you aren’t someone who can work from home or you need a staff right away a coworking or temporary office space might be an option. If you don’t need a showroom or your business isn’t retail, consider ditching the brick and mortar. You’ll save a bunch of money that you can invest in other areas of your business.
- Buying too much equipment too fast. Start small! Buy the bare minimum you need to get by in the beginning and add and upgrade equipment as your sales and budget allow. All that fancy top-of-the-line equipment does you no good if you don’t have the sales necessary to put it to good use!
- Joining every networking group and business association you’re invited to. As a new business owner, every professional organization and business group wants you on their team. And you may think it’s a good idea, but before you invest, ask yourself what you’ll get out of it. Will you go to meetings and really make an effort to meet people and get involved? If you’re unsure, go to a few meetings or events before dishing out the cash. A Chamber of Commerce membership does absolutely no good if you don’t invest the time to get involved.
- Listening to sales reps who have ulterior motives. Anyone who is trying to sell you something has one goal and one goal only: to sell you something. The PPC, SEM, Yellow Pages and Yelp reps, the friendly neighborhood magazine advertising lady and the local networking groups all have quotas. They NEED to sell you stuff to make their bosses and/or organizations happy, I know I used to sell stuff! It pays to know your business, your audience and your goals before talking to anyone who wants to sell you something. This will help you make more informed decisions.
Starting, maintaining and growing a small business takes discipline and patience. Having a goals and a plan can help you stay focused to avoid wasting time, money and energy on the wrong things. There are a couple of experts that are worth the investment from the beginning: a good CPA and a good Marketing Consultant. Both can help you avoid bad decisions that could cost you thousands.