It's common to spend more than you earn when you launch a new business and are faced with managing all the investments to bring an e-commerce business online. Financial success in the start comes down to understanding what is a required expense and what is a frivolous spend.
When you consider how many fresh businesses fail each year, how you spend your money from the start matters. Don't let unnecessary spending be the downfall of your dream. Here are three of the areas that many new businesses need to reconsider in order to save big.
1. Vanity metrics
A startup may look like it's winning, but that is very different from actually winning. The number of likes you have on social media or the size of your audience on a platform doesn't necessarily translate to success. Buying engagement online won't convert to a sale if the accounts engaging aren't real.
When I founded my company, JavaPresse, we didn't even have a Facebook page until we were doing multiple six figures per month. Our focus was first and foremost placed on creating a great product and service experience for our customers. Once this was established and growth continued, we took the time to expand on social media with a solid mission and intention.
Don't let your ego drive business decisions. Instead, focus on actions rooted in the customer's best interest.
2. Poor hiring tactics
Hiring needs to be about quality over quantity, especially when you running green. Sure, you can leverage a virtual assistant from a freelance site when you are starting out, but when it comes time to bring on full-time staff, you want to hire top talent.
Hiring the right staff from the start is vital to building a business that will succeed. Instead of being stingy with who you hire, bring on a select few experts able to provide high-quality value to the business.
Many founders neglect to hire experts out of fear of looking bad. Set this thought process aside. There is more strength in admitting where your blind spots are and filling them with the support of someone else than pretending they don't exist. This practice could lead a business to hire too many low performers who slip through the informal cracks of the startup mentality.
3. Excessive design work
Building out a custom branded and designed retail website can cost thousands of dollars. When you are starting a business, especially an e-commerce business, it is best to hold off on this elaborate expense. Today, there are a handful of site builders and purchased layouts that can get you started creating a very clean website for a fraction of the cost. Once you have proven your value and begun to bring in recurring revenue, you can then add focus onto some of the small details around your brand and the design of your website.
Be very careful about the number of times you choose to rebrand. This can become costly. The more content you have created, the more time and money you will need to execute a full rebrand event.
Remember, keep your focus glued on the customer's needs and experience. Spend the money you do have on what brings value to your revenue growth.