Over the years, I have witnessed a pattern that I like to call the “entrepreneur’s paradox.” This problem is most common with startups that don’t have access to a lot of seed capital. They are under tremendous pressure to keep costs low. Unfortunately, they sometimes take this too far and it hurts them later.
There are some investments that every business has to make. Any business that fails to invest in them will do so at their own peril.
Here are some ways that being too frugal can ruin your business.
Getting a business location with terrible visibility
You probably heard the phrase “out of sight, out of mind.” This quote was probably written with business owners in mind.
You will need to pay a premium price for storefronts or other business locations with decent visibility. Do it. The last thing in the world that you want to do is pay for a location in an area where nobody will find you. Your monthly rent may be a little lower than your competitors, but they will run you out of business when they capture all of the customers that forget that you even exist.
Inexperienced and irresponsible employees
I can’t tell you how many new businesses call out of their way to hire recent college graduates. They want to believe that people seeking entry-level jobs are capable of doing excellent work. Unfortunately, they often have nonexistent or shoddy backgrounds. They come into the company and can’t meet deadlines, follow instructions and lack the necessary skills to thrive.
Employees are your most valuable asset. Don’t skimp and go for less-qualified ones.
Unreliable web hosting
Your online presence is going to be very important. It will be even more important as a growing number of customers peruse the Internet for purchases.
In order to successfully reach customers online, you need a very dependable online web property. You can’t have it without a great web hosting plan.
Prices for web hosting vary considerably, but even the best plans are very affordable. You should be able to find an excellent hosting plan for as little as $15 a month. You don’t want to use a free hosting plan. The site will almost certainly have a downtime of 20% or higher. If you start scaling your traffic, it will be crashing frequently. You will lose customers and your search engine ranking will plummet.
Poor branding image
Your brand image will make or break your company. You can’t afford to screw it up.
Being too cheap with your brand development strategy will be the surest way to wreck your image. There a number of things that you need to do to position your brand properly.
The most important is to create a very high-quality logo. You can either hire a professional or use a premium logo generation service. Stay away from low-quality freemium logo generators that require a YouTube link to their website as a source. The quality is usually low, you can’t get large images and the attribution link looks too tacky. You will have a much better presence with a decent logo generation service.
Designhill has a free logo generator tool. It uses sophisticated AI algorithms to help you develop a logo that matches the theme of your brand. It is also equipped with premium images and fonts.
You also want to pay for visibility with the right outlets, whether you are growing your brand online or offline. They need to have a high reach for your target audience and a decent reputation.
Source: Home Business Money