I recently met a business owner who made 100 percent of her decisions based on how it impacts the immediate cash flow of the business. And I mean every decision -- from which accountant or lawyer to advise the business, what marketing could drive revenue this minute, all the way down to minute things like figuring out which credit card would yield immediate cash back rewards on expenses. Some of this is admirable but mostly it is completely short-sighted and hurting her business long term. Most entrepreneurs are cash starved and looking to save every penny they can. Don't make short term decisions that hurt long term growth. This entrepreneur only invested in marketing to drive an immediate sale and immediate return on marketing investment. I presented this client with at least 10 accountants and 10 lawyers to consider to help her business. She focused only on price and picked the cheapest lawyer and accountant on this list. Don't pick the cheapest solution, pick the best solution. Each business decision needs to do what is right for the business for the long term, not simply what is best for the bottom line in the immediate term.
Your desire to save a few bucks today, may end up costing you a lot more down the road.
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I recently met a business owner who made 100 percent of her decisions based on how it impacts the immediate cash flow of the business. And I mean every decision — from which accountant or lawyer to advise the business, what marketing could drive revenue this minute, all the way down to minute things like figuring out which credit card would yield immediate cash back rewards on expenses.
Some of this is admirable but mostly it is completely short-sighted and hurting her business long term.
I get it. Most entrepreneurs are cash starved and looking to save every penny they can. But, in this case study post, you are going to learn that cutting pennies today, could be costing you millions of dollars tomorrow. Allow me to explain.
Don’t make short term decisions that hurt long term growth.
This entrepreneur only invested in marketing to drive an immediate sale and immediate return on marketing investment. The problem is she is running a B2B business where the highest ROI spend this minute may not be the best tactic for maximizing long term sales, given the long sales cycle lead time of B2B.
For example, if you focus on driving sales, profits and returns today, you would most likely select Google as your primary marketing channel. And that will most likely result in lower ticket transactions, where the client budget is already in place and can be spent today. If she was focused on the long term, perhaps she should have invested in big trade shows in her industry, where very large ticket orders could be secured, albeit on a slower and more patient timeline.
Trying to drive an immediate return is nice, but not if you are sacrificing 10x that amount of sales and profits down the road. It would be better to focus on the biggest long term ROI opportunities, even if it requires some short-term working capital to bridge the gap.
Don’t be cheap on strategic issues — you get what you pay for.
I presented this client with at least 10 accountants and 10 lawyers to consider to help her business. I gave her a complete picture of the…
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