What’s the Actual Cost of Not Spending The Money In Business?
I once lived in a condo building that wanted to pass some changes to its bylaws. There were seven items they wanted to get approved, and they needed 75% of the condo owners to agree to make them happen.
Some of them were relatively uncontroversial — housekeeping changes to the pet policy, for instance. Some were not: like banning Airbnb bookings.
During the process, those on the condo board grew frustrated that they weren’t able to get enough engagement to reach that 75% point. Eventually, some of those who didn’t sign off on it explained that while they agreed with some of the changes, they didn’t agree with others. So, when given the choice of saying yes to both the things they did and didn’t want, or saying no to everything, they chose no.
Why were they bundled together? Because having a lawyer write one motion saved money compared to having one draft seven.
The Cost of Not Spending the Money? No Results
The motion didn’t get the 75% approval. So, nothing passed, none of the seven changes could come into effect — and the condo board’s still out the money it took to get the motion written.
If they’d spent the money? Sure, it would’ve been more expensive. But they would’ve gotten the results they wanted — possibly all of them, but at least some of them.
Instead, they got nothing. The cost of not spending the money was they got nothing.
When Running Your Business, You’ve Got to Spend the Money
When you’re running a business, you’re faced with choices about spending money every day.
You might look at your website. It’s outdated, but it costs money to upgrade it. People are still using it. Forms are getting filled in. Why not save the money and do nothing?
- An outdated website will win a smaller proportion of available traffic as time goes on
- An outdated website tells customers that you’re not keeping up with the times
- An outdated website is less likely to be user-friendly according to evolving expectations
If you don’t update your website, you’ll save money, sure. But you’ll miss out on business. Eventually, you’ll miss out on more business than the cost of a new website. Much more.
Similarly, you may look at saving some money by finding a cheaper vendor for some product. But what’s the cost of that cheaper price? It could be product quality. It could be lack of good customer service. It could be constant lateness.
How does that 10% saving look when your staff’s spending more time apologizing to customers who get defective orders threes weeks late and there’s no one to talk to about fixing it?
One more: ads. When you’re buying your first digital ads? Here’s a choice you might face: have one of your existing employees learn the basics and start running them — or hire either a new employee or an agency? After all, Google's ad-buying platform is accessible by anyone.
If you choose that first option? You’ll probably just end up spending a bunch of money for no results — just like that condo board. Buying ads is a complicated process, and it’s easy to spend a whole lot of money and get nothing back thanks to common mistakes. Plus, you’ve got all the time that employee has to spend figuring this new system out to account for — time taken away from their other duties.
Go with hiring an expert, on the other hand? You skip those mistakes and wasted time and get straight to the results. Does it cost you more? Sure — but only in terms of the money you spend. You'll get way more back in new business and internal efficiency.
Keep Costs Low and Revenue High: Spend the Money
Caveat: some things aren’t worth spending money on. Of course, you have to evaluate any decision based on all the relevant factors: an expensive hire might still not actually know what they’re doing. Sometimes, a cheaper vendor really can provide more value through a more efficient business model.
But that’s exactly the point. Evaluate cost not just by the dollars you pay directly, but the full impact of how your decision affects the business. Consider all angles.
Often, the benefits of a higher price outweigh the frustrations going cheap creates.
Flawless Inbound is a sales and marketing partner that has worked with more than 80 B2B organizations across Canada and the US. What makes us special? We get the big picture — and we help you understand how to navigate today's sophisticated digital platforms without wasting your money. Learn more below: