Entrepreneurs understand that being successful in the long run is anything but easy. You have to put in a lot of time and energy researching your target market and perfecting your products and services. A key element of business success is maintaining a well-balanced budget, especially in the beginning when you have to shoulder the burden of overhead costs.
In business, every dollar counts and there’s nothing wrong with prioritizing some areas with capital over others. However, there are some aspects of the business that you cannot afford to scrimp on.
Shortcuts are not worth taking if it means sacrificing the quality of your business operations or negatively impacting your sales.
Here are several areas where you should never cut corners:
The quality of your services
There’s no valid excuse for sacrificing quality for cost reduction. It can ruin your business’s reputation and scare away potential investors. In addition, if you fail to offer quality products or services you’ll fail to attract new customers and build loyalty from repeat clients.
Whether it’s through a live agent, social media, or even chatbots, it’s essential to provide excellent customer service, not only to effectively address customers’ concerns but to maintain brand loyalty.
If customers have a negative experience when interacting with your employees, they’re likely to move on to one of your competitors.
Technology is an integral part of society today, virtually every consumer and business rely on it every day to gather information and manage transactions. It’s important for businesses to stay up-to-date with technological upgrades to ensure that day-to-day operations run smoothly. This includes having a user-friendly and fast-loading website and only using secure payment methods.
Technology isn’t just important for keeping things running smoothly, it’s also vital to keeping sensitive information safe. If you’re handling and maintaining a database of personal information, like credit card numbers or addresses, make sure that your business is well-protected. Remember to regularly change passwords and keep anti-virus and firewall software updated.
Marketing is essential to the success of every business, after all, no one will buy your product or service if they don’t know about it.
If you’re on a tight budget it might seem like a good idea to cut your marketing budget, but this could wind up hurting your business in the long run.
Instead, try focusing on low-cost marketing efforts like utilizing social media, blog content, and email outreach and prioritizing initiatives to only spend where you are seeing traction.
Some small business owners don’t make getting insurance a priority, thinking that they don’t need it since they are just starting or that it’s an extra cost to their already long list of expenses.
But, the truth is, insurance is a necessary investment in the health of your business. It can actually save you money in case of an unfortunate incident since even a single claim could mean losing a significant amount of money on legal fees, settlement costs, or medical expenses.
The type of insurance you need may depend on the industry you work in, but here are some basic policies you should consider:
● General Liability: This policy is the bread and butter of insurance. It provides broad protection against third-party bodily injury and property damage.
● Commercial Property: As the name suggests, this policy protects the physical assets of your company like your store, equipment, and computers.
● Cyber Liability: All businesses, big or small, are at risk of attack from cybercriminals. One of the only ways to ensure that you’ll recover from a data breach is to have this policy in place. Otherwise, you’ll be stuck paying out of pocket for expenses related to cyberattacks like legal and settlement fees, and notification costs.
● Workers Compensation: This policy is usually mandatory for most businesses with at least one employee on the payroll. It covers expenses related to workplace injuries like medical care and rehabilitation.
It should go without saying that managing the cash flow of your business is so crucial to your business that you cannot afford to cut corners in this department.
If you don’t feel equipped to take it on with a software tool, invest in hiring a licensed accounting or bookkeeper who will make sure that your financial statements are kept updated, and your budget and cash flow is managed well.
In addition, knowing different tax policies can help you take advantage of various tax breaks, and avoid any penalties from regulators. With the help of an accounting expert, you can spend more time focusing on growing your business.
As a small business owner, it may be tempting to always look for ways to cut corners. There’s nothing wrong with that. After all, the goal of running a business is to gain and maximize profit.
But, cost reduction becomes dangerous when it impacts your sales and operations. Make sure to avoid cutting corners in the vital areas of your business, like the ones mentioned above. Strike a balance between taking shortcuts and investing in crucial initiatives so you can continue growing your business.
By Emily Lazration, CoverWallet
Emily is the Content Marketing Specialist at CoverWallet, a tech company that makes it easy for businesses to understand, buy and manage commercial insurance online. She has written for several outlets including Inc., Ooma, and Fundera covering small business news and advice.