Business Spending Mistakes Every CEO Needs To Be Aware Of

Marketing campaigns, the latest equipment, and well-reputed training resources all seem like good investments for a business on the surface, but if you’re not taking the time to consider whether you really need these things or not, you could quickly run your business into a financial crisis. If your budget is stretched as it is, it’s absolutely essential to make smart spending a priority. Here are a few common spending mistakes to avoid…

Spending to Impress

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Burning through your budget for the latest technology, equipment, and marketing materials to impress your customers may seem smart at first, but if this is the only real reason behind a decision, you’re going to wind up in deep trouble with your cash-flow. If you run some calculations and decide the cost of making an app is worth the improved user experience and greater exposure, then go ahead and do it. However, if you’re thinking of developing a business app just for the sake of it, it’s time to take a step back. Every little investment in your start-up should be made with the aim to improve profitability, not to impress customers or prospective investors. Make investments based on upping your profit margins, and worry about your brand image later!

Investing Heavily in Untargeted Marketing

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A lot of small businesses make the critical mistake of spending a large proportion of their budget on general, untargeted marketing. While it’s true that banner ads on the right blog or journal can be very influential in giving your brand more legitimacy, the majority of businesses won’t get the kind of return they’re going for if they invest in untargeted marketing. Targeted marketing, in combination with networking and referrals, will provide much greater value for money compared to more general forms. Getting the word out about your business is essential to approach in a smart, effective way, so make sure you’re not wasting your hard-earned capital on channels that aren’t going to pay off.

Attending Expensive Events

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As you’ve probably heard before, when you’re first starting out in business, you’ll need some of the information and networking opportunities that are offered by seminars, conventions and conferences. With all the emphasis on the importance of events, it’s very easy for inexperienced business owners to go overboard. Go to events, but make sure you’re choosing them wisely. Make a point of defining your networking aims before sending a representative to an event, or going to it yourself. Check out some past events, and reach out to prior attendees to get their input on them. Spend some time chewing over the potential benefits long before you decide to invest in attending the event. You may be able to dodge the cost completely, simply by networking with leaders in your industry yourself; offering to take them out for lunch or coffee, and soaking up as much information as they’ll give.

As you plan out the ways you’re going to invest in your business, keep aware of these common blunders, and do everything you can to avoid them.

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