Being frugal runs in my family. My mother loved to tell the story of how back in the late 1970’s, she got a phone call from the local Gas Company congratulating her on having the lowest gas bill in the entire city during the coldest month of the year. That was a proud moment for my mother and an educational moment for us kids as we huddled together for warmth. She was extremely careful with money and so am I.
Today I clip coupons, hunt for bargains and am unafraid to suffer a little bit of cold in the winter in order to get my gas bill a little lower. I have always been willing to substitute a little elbow grease to save some money (why buy new furniture when your old furniture can be refinished?) and I am proud of my minimalist lifestyle and its smaller carbon footprint. However, this kind of thinking has not served me as well in my small business. I have had to reeducate myself around ways to spend money to make money.
I remember the exact moment when I realized that I was using a dysfunctional spending paradigm that didn’t work for my business. I was shopping online at Staples (love their free delivery!) and found myself automatically choosing the off-brand packing tape to save a few pennies per roll, when it dawned on me that when it arrived the next day, I would have to use that tape and it would have to not only work perfectly but be a time-saver - leaving me free to do the things that earn money: creating listings for my online store, doing product research, answering customers’ questions, etc. If life were a comic strip, a giant light bulb would have appeared over my head as it dawned on me that I had to learn to spend money differently as a business owner. I have had to rethink my spending in a lot of areas:
Packing materials: Shipping is a huge part of our online toy and party favor business, and a big chunk of my day is devoted to packing products for shipping. I can’t afford to be cheap about the materials I use.
- We now buy the extra-wide, three-inch, packing tape, even though it costs more than double the price of the standard two-inch tape. When you are packing dozens or more packages a day, and taping shipping labels to packages, it can save lots of time, energy and frustration.
- We have substituted poly bags for manila envelopes and boxes. Although they tend to be more expensive, the elasticity of the material and simple pull tab closure saves us time and energy and we get a professional looking, well protected package to boot.
Marketing and Advertising: I’m an expert at selling on eBay, but a relative newbie at selling in our online store. Since eBay does most of the marketing for us, this part of our business proves to be quite a challenge, both intellectually and financially.
- Business card and logo design. If you are new or just getting started, the Small Business Development Center’s speakers tell us small business owners again and again that this is the area where we do need to spend some up-front money in order to present a polished look for our businesses.
- Online advertising. When I spend $10.00 at the grocery store, I bring home oatmeal, bananas, blueberries and a loaf of bread. But when I spend $10.00 on marketing and advertising venues such as Google AdWords, FaceBook Ads, or others, and when we pay monthly fees for website hosting, I am not really sure what I get. It is possible to analyze diagnostics and see how many clicks we got, but ultimately it is more difficult to know how that translates into a real useable product for our business. Still, our off-eBay sales continue to grow monthly, which is our ultimate goal.
Customer Accessibility: making sure our customers can reach us and have a positive buying experience is key to future success in sales. We are a very small business, but we invest in a few tools that not only lend us the appearance of being bigger, but also can increase customer confidence.
- Credit cards. We pay a monthly fee to accept credit cards in addition to PayPal, even though 90% of our sales still come through eBay and eBay doesn’t allow buyers to complete credit card sales through their site. We fill a need for the few customers on eBay that don’t use PayPal or prefer to use credit cards, and we also set ourselves up for growth as sales in our online store continue to climb.
- Phone sales. It dawned on me while doing online holiday shopping this season, that I am much more comfortable and more likely to complete the sale when the website has a customer service telephone number. Although I may never use the number, just knowing that they are actual people who could answer a question or handle a concern boosts my confidence. We have since set up a dedicated phone line for customer service and phone orders.
Technology: In my personal life I can easily make do with a computer that isn’t cutting edge, but in my business life I need to have technology that makes my life easier. We don’t have anything too fancy, but for what we do have - desktop computers, laptops for when we are mobile, good quality camera and phones – we don’t scrimp. We make most of our technology purchases at Newegg.com (once again, free shipping!) Having equipment that works well means you don’t have to work as hard. And remember, if it is a business expense, it may be tax deductible.
All of this is not to say that you should go hog wild and spend money like a rock star. Instead you should be careful, just not fanatically so. There are lots of ways to save money that can really help you grow your small business, such as using free social marketing venues to support your online sales. But ultimately we are in business to make money. The more we can make our small business and our products and services shine, the better. It is worth it to spend the extra amount to keep our customers happy. And get new ones.
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Posted Dec 31, 1969 4:33:30 PM by: Marketing the Romance out of Valentine’s Day | Getting Started