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Do You Have to Spend Money to Make Money in Your Small Business?

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2021 07 18 spend money make money

[5-minute read]

Written by guest writer and Truevo Growth Marketer, Marlene Bramley

If there’s one thing more difficult than making money, it’s spending it. Smart Alecs will tell you, “You must spend money to make money.” Have you noticed, none of them are rich nor successful? You have to discern between spending that’s an investment in your business and spending that’s not. Let’s take your storefront – or website in the case of ecommerce businesses – for instance. Do you spend money to bling it up, showing everybody how successful and fantastic you are? Or do you take that money to really invest in your business and appoint better staff, improve your processes or structures and promote healthy cash flow? I know which one I’d choose. 

There are two kinds of people: those who believe that throwing enough money at something will magically make it better, and the other one is an eejit who peels oranges in his pocket – too stingy to share or spend a penny. Actually, there’s a third kind of person; the reasonable and sane one. That’s the one who runs a successful business. He knows when to peel oranges and when not to. 

It boils down to these three things: you need to spend money to get customers, keep them, and grow your business. That’s it! 

Let’s break it down. 

Get customers
Marketing is one of those contradictions. You’ll find various strategies and innovative ways to get customers when you Google it. But how do you know which methods will work and which ones won’t? People mention engagement rates, reach, your share of voice, market share, and all sorts of fancy terminology. All you need to know is whether a campaign will bring you more business. To be able to do this you need to know who your customers are, where they hang out and what they talk about. Some in-depth market research will come in handy. Spend decent money and keep on doing it because people are like fish, they move around. Good market research will also validate your concept and recognize potential risks – you can never be prepared enough.

Stay up to date
Companies working in the ecommerce space should spend time and effort to follow global data trends. GWI provides a data service that will give you insight into local and international markets so that you can move at the speed of trends. Statista, on the other hand, provides data and insights from Ireland and can be a valuable resource. 

Tech is your friend
Effective tools and technology will determine if you wake up in the morning looking forward to a productive day, or if you count the number of hairs on your brush. There is nothing as disheartening as rolling a massive boulder up a hill only to start from scratch every day – just ask Sisyphus. He’ll tell you that the appropriate tools will give you the competitive edge, reduce costly mistakes, and increase your productivity. Start with the Google Suite as a foundation and find your way from there. 

Hire the right people
Speaking of productivity – your team is as important as the tools they use are. Get the right person in place to help you hire the people you need to succeed. When you hire, look for broader skill sets, new ideas, and allow your colleagues to fail. It’s the only way they can learn and grow. One other key skill set you need on board is a good accountant or accounting firm (we’ll get into this later in the month). They will help you invest properly, avoid fines, pay taxes, and maximize profits. Oh yes, and some legal advice can also make quite a difference, especially when you start getting into contracts of various kinds. But you can subcontract those as and when you need them. 

You also need to spend money on marketing and branding. If people don’t know your brand they can’t buy it. We ran a three-part blog series all about digital marketing, find Part One here. You’ll find other articles on the Truevo blog about various topics from marketing to web analytics to SEO and more that will help you navigate the SME and ecommerce space. 

Oberlo, a dropshipping company, published a great blog post that talks about starting a business on a small budget. They also cover various marketing principles that are insightful. Inspiration publishes a helpful digital marketing strategy and how to go about it in their blog. You will also find 10 digital marketing resources for SMEs on their page.

Keep customers 

One thing is for sure, it’s much cheaper to keep customers than to get new ones. Some companies estimate that it’s as much as five times cheaper! We all know what it feels like to be number 57th in the queue listening to, “Your call is important to us,” just to be disconnected when you get to the front of the line. Make sure your company doesn’t do the same. 

This is not the time to hold onto your oranges! Spend money on a customer relationship management system (CRM) like Salesforce or Hubspot. They are worth their value in gold and will help you track all customer complaints, products, etc. They will also help you improve your customer journey. Put your best people in customer service, they are your company’s face to the world. 

Grow your business

This is the most undervalued area of spending in SMEs. People don’t normally invest in educating themselves, nor their employees. If you invest in your own technical knowledge and in the technical knowledge of your staff, it will have a direct impact on how well you attract and retain customers. What’s more, you’ll all feel as if you’re growing and doing meaningful work. The best news is that it doesn’t need to break the bank. You can pick up free courses, webinars (especially since the outbreak of Covid-19), schedule online seminars, do one-on-one business coaching, online courses for entrepreneurs, and much more. Don’t forget the soft tools that will keep you and your staff productive and motivated.

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