Have you ever witnessed a business that was acting so cheap that it was obviously hurting their business? Almost like they didn’t want to be in the business anymore and were purposely burning their business down? I have.
It’s a sad situation that doesn’t have to happen, yet it does all the time. It may seem like obvious mistakes to those on the outside, but to those who work at the company it may be a different story.
I’ve personally seen businesses close their doors because they were too cheap. The owners always believed they were helping the company by being cheap, but it actually turned out in many cases that they were preventing their company from growing. They were turning customers away, they were making good employees leave, and they were losing out on possible sales.
Below is how being cheap can hurt your business:
You won’t invest in items that will make your business appear better.
Depending on what kind of business you run, I’m sure there is some sort of appearance that you would like to keep. Your business should always be presentable and demonstrate the image you want your customers to see.
For example, if you run a brick and mortar store where customers come in and shop for high-quality expensive items, your store should be presentable and clean. If you skip out on cleaning windows, cleaning the floor, and so on in order to save a few dollars, this can scare customers away.
You run your employees ragged.
Do you have enough employees for your business? If you make enough income to hire another employee when you need one, it’s something you should definitely look into.
You do not want to overwork your employees and make all of them want to leave your company. This can cost you your best workers, and they may leave your company and join your competition instead.
You try to do everything yourself.
I’ve seen this happen several times. A person is building a business and tries to do everything themselves. They might be afraid to hire out because of the costs and because this means they may lose some control of their business.
However, this almost always is a recipe for disaster. Yes, in the beginning you may be able to do some tasks yourself, but you may actually start to hurt yourself and your business. All businesses either grow or die out. If your business is growing, then you will need help eventually with your business.
I have mentioned this story before. I used to work next to a retail store where the business owner literally managed everything himself. He was the store owner, he managed the inventory, he cleaned the store, he stocked the shelves, he opened and closed the store each day, he was the cashier, and everything else. His store ended up closing because he was too cheap to hire anyone to help him. There’s only so much one person can do before it negatively affects their business.
You won’t hire an accountant or a lawyer.
This one is related to the above section, but I think it deserves its own little area. Too many people think they are saving money by not hiring an accountant or a lawyer for their business. In some businesses this is not a necessity, but in many they are.
An accountant can save you money on your taxes, and help you in many other areas such as helping set up and manage retirement plans. A lawyer can help draft agreements and contracts, and they can also do other things such as help you get a trademark.
How else do you think being cheap can hurt a business?
What real life examples have you witnessed?