The Need, the Want and the Barter
Bluefront Capital is always looking for new and innovative ways to help our clients. In hopes of being a productive and valuable part of our clients' teams, we started a newsletter and will provide tips on how to grow your business during a recession. You can expect us to cover new topics every month. In this first issue, we will talk about the difference between "need to have" and "nice to have" and how to think about various business expenses. Many entrepreneurs were brought up with the mentality of borrowing and spending in order to attain perceived business needs and then doing everything possible to work their way out of the red and into the black. We suggest a different approach that consists of 3 parts: analyzing, investing and bartering.
Analyzing
Before any major project is taken on, as a business owner, one must ask him or herself, what are the goals of the next investment (for example PR services, Marketing Services or even office space)? When using the borrow / buy now earn later mentality one may say "I need it all now!". Upon closer examination, we can break down these needs further by asking some questions. For a simple question such as "Why do I need office space?" - many answers come to mind, such as, "To show that I have one", "To house my employees", or "To take clients for negotiations". While some of these reasons are more relevant than others, by taking a step back we can see that none are good enough to pay for an office if the cash is not there. The exception being a workplace for employees, and even with that, there are always workarounds, such as working remotely and meeting clients in their own offices.
Investing
The second part of our process is "Investing". When going back to the original 3 wants, some wants are in fact needs. For example, in order to get clients, especially in this market, you absolutely must invest in marketing & PR. Again, you must analyze the potential ROI of online marketing, mailings, phone calls, events and other options, but whatever your decision is, you must invest in marketing in order to attract new clients and keep the current clients happy. It is often an overlooked area of investment for business owners, because in contrast with sales efforts, it does not have as high of a short-term benefit as hiring a sales person, for example.
Bartering
Finally, businesses are often reluctant to pay for PR, accounting or some other pesky necessities until the last possible moment because it means less spending in other areas. For a small business owner, as for everyone else, cash is king. So what else can we do? I am a firm believer in negotiating and bartering. By speaking with others in the businesses community as well as leveraging the contacts of your advisors, you can often save money and time. It never hurts to ask for services even if you can't afford them. Be up front about the fact and ask if you can barter. Never be afraid to ask; you will be surprised by the responses you get.
Analyzing
Before any major project is taken on, as a business owner, one must ask him or herself, what are the goals of the next investment (for example PR services, Marketing Services or even office space)? When using the borrow / buy now earn later mentality one may say "I need it all now!". Upon closer examination, we can break down these needs further by asking some questions. For a simple question such as "Why do I need office space?" - many answers come to mind, such as, "To show that I have one", "To house my employees", or "To take clients for negotiations". While some of these reasons are more relevant than others, by taking a step back we can see that none are good enough to pay for an office if the cash is not there. The exception being a workplace for employees, and even with that, there are always workarounds, such as working remotely and meeting clients in their own offices.
Investing
The second part of our process is "Investing". When going back to the original 3 wants, some wants are in fact needs. For example, in order to get clients, especially in this market, you absolutely must invest in marketing & PR. Again, you must analyze the potential ROI of online marketing, mailings, phone calls, events and other options, but whatever your decision is, you must invest in marketing in order to attract new clients and keep the current clients happy. It is often an overlooked area of investment for business owners, because in contrast with sales efforts, it does not have as high of a short-term benefit as hiring a sales person, for example.
Bartering
Finally, businesses are often reluctant to pay for PR, accounting or some other pesky necessities until the last possible moment because it means less spending in other areas. For a small business owner, as for everyone else, cash is king. So what else can we do? I am a firm believer in negotiating and bartering. By speaking with others in the businesses community as well as leveraging the contacts of your advisors, you can often save money and time. It never hurts to ask for services even if you can't afford them. Be up front about the fact and ask if you can barter. Never be afraid to ask; you will be surprised by the responses you get.
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