Why business owners want to be so cheap?

[Hemlock140]

Originally Posted by kevinm

37% after paying all salaries and expenses?

Yes, that's the profit. Not bad if your gross sales are at $2 million, but not too good if the gross is only $100k and you are trying to support a family. The better the sales, the more expense for labor, materials and supplies. My best year was about $200k in sales, and I had to pay 4 employees to keep up with the work.

[MrJones17]

Some business owners are barely getting by and don't have a choice but to be cheap.

But a lot of times, people are just greedy and only in it for their own personal gain.

I've even fallen into this position of being too cheap plenty of times. I really skimped on spending when I first started out, mainly because I wanted to keep all of my revenue as profit. I didn't have any idea how real business works. I didn't pay nearly as much to my sales team, which I've since learned is the foundation of my business.

I outsource a lot of processes now, include web development, marketing, and most recently, contact center support. I use to have random Indian firms responding to my customer support requests that came through my social media channels and emails. I should have known it wouldn't have been successful, but I wasn't thinking about how quality of customer service impacts the consumer experience. This is especially true for online e-commerce stores like what I own.

I've since hired a professional contact center team to manage all of my customer inquiries. Is it way more expensive than the $70 a week I was paying the firm in India? Absolutely. But customer retention has gone up, conversion rate has increased steadily, and a lot of other engagement metrics are up. It's still pretty early in my switch to this company, but everything seems to be pointing in the right direction.

All of this said, there's definitely a right time to be cheap though. I stayed cheap when it came to promoting my business. I never spent a dime on advertising. All I did is sign up for Help a Reporter and you literally get emails every day of reporters looking for quotes from business owners/professionals/specialists. It's a free service and it works like a charm. I find that if I respond to at least one or two a day, I'll usually get quoted at least a couple times per week, especially on the smaller blog publications.

[Mugsy]

I am into my 1st year as a self employed Sole Prop home based business owner, and I find this thread very interesting.

I lost my job last June. Cashed out the 20 year State pension (they let me resign)

I found a company and made a full offer. It was the only offer, thanks to my broker. I acted fast. He cut everyone else off because I was determined and hungry to buy it.

I have learned so much but I am also like a sponge. I listen to the consumer issues, their requests etc.
I am trying to get things better for the customer.

I sell books. I have book printing issues. I sell books almost each day. I want my own print press. I have been thinking this since March 2017. I validated this decision due to the fact that my last order yielded 8 damages books , damaged during production. And then there is the lack of receiving my book orders. I placed an order Oct 5 and I had to replace it Oct 15, I have learned to order early.
I still want my own indie contractors to occasionally run the print press, located inside my 2 car garage at my house...

My point is, I am not cheap. I like to delegate the work out locally to people who are not flakes are genuinely interested in a common goal and so they provide a service that I will gladly pay for and take as a tax write off no matter how that gets sliced. I have tried to hire web peoples and I have losses for this year...but I am being sued rite now in Divorce Court by my soon to be ex.

Nice that the courts he filed in LA with recognize that it is a Domestic Violence case with out children.

So, I am maximizing biz losses due to this divorce, he wants my dead presidents.

Carry on

[MrJones17]

@Mugsy: you don't think the book business is dying? Print in most forms hasn't been doing well at all since the Internet became a thing.

[tommy64]

Originally Posted by Hemlock140

Yes, that's the profit. Not bad if your gross sales are at $2 million, but not too good if the gross is only $100k and you are trying to support a family. The better the sales, the more expense for labor, materials and supplies. My best year was about $200k in sales, and I had to pay 4 employees to keep up with the work.

No wonder you took a job!

[Mugsy]

Originally Posted by MrJones17

@Mugsy: you don't think the book business is dying? Print in most forms hasn't been doing well at all since the Internet became a thing.

My books have never been subjected to google books territory. No reviews on yelp no social media.

Advertising is word of mouth.

I have an e Commerce and sell online exams as well, but a lot of Customers want the books like yesterday.
Some customers want both online study prep as well as the books.

Compare what I am selling and think of the CA State Bar exam or SAT or any Government entity where you need to pass a state exam...this is my market...

I may add application services in FY 2018