Avoid Wasting Money in Your New Business
When you set up a business, the bottom line is to make a profit. It can take time, even years to achieve, but you should have a financial strategy that considers that. Your expenditure will very likely exceed your income at first, but you have a vision that if you follow your business plan and marketing strategy, you will begin to see a change over the timeframe you have projected. What you should also do is pay attention to where you could be wasting money in these early, critical stages, so the turnaround to profit isn’t held back.
A key thing to remember is that your pricing will have a significant influence on the success of your marketing. Set your price at the right point, where you are not undervaluing your service or squeezing your margins too tightly. It can be just as big a mistake as over-pricing, for if something appears too cheap customers will be concerned about the quality. Pricing is something of an art, but there are resources like over head watch available to provide guidance.
Advertising is where money can disappear down a black hole, and you need to keep a tight rein on your ad expenditure. Take AdWords for example. There’s no doubt that a successful campaign is a highly effective way of promoting your business, and it’s a justifiably popular route to reaping substantial rewards, but for this very reason, it can be a money pit. Bidding on keywords at rates that seem reasonable but can soon mount up to large amounts is akin to gambling. You may find yourself thinking “If I just bid another $10 on this keyword, what a difference it will make” only to find you are doing the same the next day and the next. You may then find you’re spending hundreds of dollars on a campaign that isn’t giving you a return on an investment of this scale. If you use AdWords, or anything similar, stick to the budget and if you’re not an expert yourself, employ someone who really knows the best way to use the system for maximum returns.
New businesses are often targeted by companies trying to sell you ad space, media features, billboard space, radio ads, any number of schemes that sound amazing but probably won’t do you much good at all. The salesperson hooks you by filling your head with the reach of the publication, or the increase in revenue other businesses have reported, and it’s tempting to think you shouldn’t pass up this opportunity. You should. Don’t fall for any sales calls, stick to your marketing plan and select your own paid adverts when you are ready to start on that phase of your campaign.
Get your pricing spot on, start with the inexpensive options when it comes to advertising and other forms of marketing, and don’t be duped into buying ad space you don’t want. Stick to your strategy and evaluate how effective your marketing tactics are on a regular basis, so you can adjust what you’re doing and add new approaches when the time is right.