West Seegmiller – Advice For Small Business Owners With Regards to Investment
Having worked with small businesses for many years I understand very well the sensitivity which is felt by owners when it comes to investing capital in something. No matter whether this is to outsource an area of the business or to invest in marketing, each and every penny of capital must be heavily scrutinized. The key to all of this of course is ROI, those three magic words return on investment which all small business owners need to be convinced of before parting with their cash. This was the case before Covid struck, and now, under this turbulent business climate, that anxiety and sensitivity to making investment decisions is more heightened than ever.
Business guru West Seegmiller has been discussing this of late and what he believes should happen is that business owners have to completely change their way of thinking in terms of their money and where to invest, and I believe that Mr. Seegmiller is absolutely right.
Whilst unfortunate, one of the reasons as to why so many businesses got caught out this year was that they had a large amount of exposure and once lockdown kicked in, the levee broke. This is a lesson for all small business owners right now, because this pandemic is yet to go away and who knows what is around the corner. The key then is to be smart when buying stock, the last thing you need is slow moving items, which is basically capital that is tied up. If you do have such stock levels then take action to remedy the situation, even if that means a small loss on your original investment. The key in the current situation is fast moving, liquid stock.
Your business should still be investing money in marketing, but the nature of the campaign has to change. No longer should you be looking into marketing the business with an eye on long term growth. What you should be focusing on instead is promoting individual products which are attractive even in the current environment. The key here is ensuring that those ad dollars are really working to get you money in the cash register now. A failure to do this could mean that there is no brand to grow tin the future.
Outsourcing is a tough one to deal with, on the one hand you may wish to bring things back into the business to save money, yet on the other hand you will be sullying the waters with your patterns, and that could come back to bite you. The key here is to be both moral and smart by having open and honest chats with your partners. Look to reach a short-term lower cost agreement with them, which will both ave you a little bit of money but also help to support them, of course you will also get the benefits which outsourcing brings.
When it comes to investments, the new normal is being smarter than ever before, even though that may seem like a stretch for some small business owners who already have enough anxiety over spending.