The first area I want to speak about is marketing. Now, lots of people think that they just need to spend money on marketing and that is how they generate their leads, their sales. But the piece that they don’t do is then examine the data to really be clear on which pieces of marketing are working for them and which marketing pieces and marketing activities are not. We need to be really, really clear that we understand the data that supports our marketing activities, and that means tracking all the data. That means getting all that data in one place and having someone look at it who understands what it means
So making sure that, for example, your paid ad spend is being the most efficient it can be and working for you. Making sure that any organic work that you are doing is actually moving the needle in the correct direction in the way that you want to go. So tracking all your numbers around the marketing, around the interactions that you get, the engagements that you get, the click throughs that you get, the number of buyers that you get as a result of different channels, is going to be massively helpful in that. It’s going to help you assess whether or not you are spending what you should be on marketing or whether you are overspending on marketing, you’re not getting that return that you need from your marketing spend.
Another area that we often often see entrepreneurs overspend on is office space. What we see is that people get excited when they start hiring staff and they immediately want to get physical office space. Now, the problem with this is that it doesn’t actually usually, depending on the business, but usually deliver any value to be in a physical office space. You don’t necessarily get advertising revenue from it, or if you can’t put up ads or boards or plaques or anything like that, then no one really might know that you were there. You don’t get a huge amount of value from actually having a physical office space usually. However, it’s usually something that a lot of people actually want to have. So the question is, do you need a physical office space for your business or can your business run with a virtual office space? So everyone working from home and using various online tools in order to facilitate communication and things.
I once mentored a fellow accountant who was building their practise, and they said to me, oh, I don’t want to bring on staff. I just want it to be me as a solopreneur because I don’t want to have to sign up for office space. I immediately said back to them, well, what makes you think that you need office space when you’ve got staff? And something then clicked for him, and he thought, oh, because that’s what accountants do, we have office space. Now, as some of you might know, that’s not how I operate my firm at all. We are all working from home and everyone is, well, working from home or wherever they want to, quite frankly, and we don’t have a physical building that everyone comes to work from. We have online spaces where we gather, we use Slack a lot and that kind of thing, but we don’t have a physical office building where the staff are all congregating.
A third area that we often often find entrepreneurs overspending on is staff or team members that are not delivering to the bottom line in their business. Every single team member’s job role and job description needs to be set up so that it delivers to the bottom line in your business in some way, that it has a profit producing impact. If it is not, then the question is, does that staff member really need to be working with you? Or does that job and those tasks they’re doing, do they really need to exist? Because what is the purpose of those tasks and those roles if they are not positively impacting the bottom line in your business? So assessing every staff member’s role, working out what can be done to ensure they are profit producing for you, to ensure that their job is set up so they can be profit producing for you, and making sure that they understand that revenue and profit are key things in your business that they need to have an eye on as well. They need to be incredibly aware of those things, and they need to be incredibly aware of their impact on them as well.
The fourth thing that we find that entrepreneurs overspend on that I want to speak about today are tech tools. It can be so easy to sign up for a piece of technology, for a piece of software, and then find that we’re really either one, not using it at all after a couple of months, or we have signed up for something else which is basically doing exactly the same job. Or we can find, two, are not really fully utilising the tool, and therefore actually we’d be much better downgrading the current plan or moving to a different service provider that provides a tool with less bells and whistles on it.
The other part that I see associated with tech tools is having too many licences at any one time. For example, if somebody leaves your organisation, not suspending their email address, and therefore paying for an email address for years that you don’t use, or not taking them off as a log in user for various pieces of tech where you are charged per user. That can be a big thing to have a look and audit as well in your business.
I hope this episode has been useful for you in understanding the key areas that entrepreneurs overspend on, and hopefully manage to avoid or correct some of those pitfalls in your own business. Thank you so much for listening. Until next time, let’s find the clarity in your numbers, increase your wealth, and get more money in your pockets.
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