BUSINESS SOLUTIONS | FINANCE
5 Penny-pinching Sins to Avoid
By Sean C. Castrina
Sean C. Castrina is the
author of 8 Unbreakable
Rules for Business
(Champion Publishing, 2013). He is
also founder of www.newbizcoach.
org. A successful business coach
and a true entrepreneur, Castrina
has started more than 15 successful
companies in the last 18 years.
The ability to stretch a budget is a survival skill, especially in those cash-strapped early
days. However, if a spa owner’s goal is
to cut costs at any cost, she’s heading
into dangerous territory.
Avoiding unnecessary expenses is
one thing—becoming a fear-driven
perpetual penny-pincher is another.
Cheapness can hurt the value of a
business’s products or services, or the
efficiency of your business, both of
which will drive clients away.
Subject every prospective
cost-saving measure to this litmus
test: What are the possible short- and
long-term effects of this decision?
Will it save my business money
without negatively affecting profits?
Sometimes, the answer is “no.”
Following are five penny-pinching
sins that may be costing skin care
1. Paying employees the bare
minimum. This sends a very clear
message: “I place a low value on you
and your place in my company. I
don’t see you as a person with talents
and unique abilities, but as a debit
on my monthly expense report.” This
message sends skilled individuals
running for the hills, costing more in
lost productivity, turnover and client
Answer this: Would you want this
person working for the competition?
If not, pay them well and keep them
on your team.
2. Using an in-house bookkeeper.
Too many small business owners do
bookkeeping in-house. Why
is that a problem? First, many
don’t completely know what they’re
doing. For instance, they may use
unnecessarily broad headings or
classify items incorrectly. Sooner or
later, an accountant—or worse, the
IRS—will charge to correct these
mistakes. The larger problem is that
it’s easy for an in-house bookkeeper
to steal from the business.
3. Skimping on legal services.
For general matters, hiring young,
new-to-their-firm attorneys whose
rates are low and who are really
trying to make their way is OK.
However, for matters in which a
company’s survival is at stake, hire
the best lawyer possible.
4. DIYing branded materials.
“You have one chance to make a
good first impression.” This advice
is heard over and over again, but too
often, business owners forget it—to
their detriment. The fact is, clients
are always going to judge businesses
by their covers, which makes it
invaluable to hire professionals to
brand your skin care facility.
5. Relying on word-of-mouth
marketing. Have you ever heard
of Budweiser? This, of course, is a
ridiculous question. Everyone has
heard of Budweiser. Among many
other details, the company produces
an endless stream of expensive,
just to remind consumers of the
well-established fact that it sells
beer. The point is, no matter how
successful they are, great companies
are always trying to communicate
with and attract potential customers.
Although client referrals are
very powerful and can really help
drive a business, if an owner tries
to save money by not budgeting for
marketing, they’ll save their way right
out of business. It is a necessity to
spend money to attract new clients.
In business, you get what you
pay for. If spa owners skimp on
something that affects the experience
their company offers clients, or
that compromises its ability to run
efficiently, their efforts will probably
backfire. As an entrepreneur, it’s
beneficial to be frugal—but it really
doesn’t pay to be cheap.
Reproduction in English or any other language of all or part of this article is strictly prohibited. © 2014 Allured Business Media. 28 June 2014 © Skin Inc. www.SkinInc.com
Cheapness can hurt the
value of a business’s products