For those who work hard to attract well-paying customers, consider the fable of a hungry grasshopper who begs an ant for food when winter comes. The situation encapsulates business lessons on the virtues of saving for the future.
For ordinary businesses – subchapter S entrepreneurs, agency owners, consultants, business coaches, small business operators and sole proprietors – every dollar spent comes with a lineage that can be traced back to its source. That dollar spent must first be earned, according to Fortune 500 and major agency marketing expert Alf Nucifora.
“Remember what you need to sell to spend a dollar,” Nucifora said in a phone interview. “Think five to ten times more if you’re working on standard margins. Then reconsider the purchase. Seen through this prism, cheapness becomes a reward rather than a sign of derision.
Cheap is such a harsh word; I prefer the frugal. As another business mentor taught me, when you own the business, you keep every dollar you don’t spend. Like Aesop’s fable of the ant and the grasshopper, you might need those dollars on a winter’s day.
“As the headlines scream about wealth gone mad – tech billionaires with multiple private jets, ostentatious 7-figure wedding receptions for favorite girls, massive yachts demanding millions in annual operating expenses – it takes consider these outliers like animals in the zoo: an interesting species, flamboyant in behavior, if not in plumage, but requiring nothing more than voyeuristic interest,” Nucifora said.
Nucifora is the president and founder of LuxeSF which incorporates the entire Bay Area including Carmel-Monterey, Silicon Valley and Napa-Sonoma. Currently, he is also the director of a marketing consultancy company. We met before he “retired” from his responsibilities as president of the southeast office of a $310 million advertising agency in 1990.
“As a practicing small business owner and operator for over 30 years, there are basic commandments of spending behavior that should be taught at an early age, as an antidote to the relentless consumer messaging that permeates consumer marketing communications. and popular media entertainment,” says Nucifora. “Take it from a Boomer who’s still working and once spent with abandon because it felt good: I wish a lot of those outsized dollars could now be recouped.”
Here are several Nucifora reasons for managing frugally:
Perfect information does not exist. “So stop trying to look for it or buy it. Be prepared to make a trading decision based on the information available and your own accumulated wisdom and experience. »
Beware of the creeping break-even point. “He’s a former business professor admonition. It means that you always strive and promise to achieve profitability, with the best intentions in the world, but the lure of spending always seems to thwart those intentions.
Name a Scrooge. “We have our Scrooge and are proud to promote his brand. She’s a constant pain, and her need for expense justification drives salespeople crazy. But it saves us a fortune. And, it provides cover for situations where we will offend by saying no to people who were afraid to offend.
Take care of the pennies and the dollars will take care of themselves. “A prominent regional bank CEO always checked the lobby office when he left each day to see how many FedEx packages were stacked up for pickup. Inevitably, he found that many could be mailed, saving hundreds every week and thousands every year.
Micromanage competently. “Micromanagement has developed a bad reputation lately, as tech prodigies preach from 30,000 feet from the big, long, sight. Remember that God is indeed in the details, especially for small businesses where every customer and transaction truly matters.
Do your homework. “Be prepared to shop around for prices. That’s the beauty of the internet. Someone always comes up with a better deal or a cheaper price.
Go for the repeat dollar. “Yes, we need new customers and new dollars, but repeats are easier to acquire and provide more profitability. Yet most players in the corporate world, especially service industries, forget about the relationship. customer once the initial transaction has been completed.
Originally from Brisbane, Australia, Nucifora entered the advertising and marketing industry on the corporate side working for two Fortune 500 companies, first in Australia and then in the United States. He then moved into the advertising industry and later moved into agency management.
Throughout her career, Nucifora has learned that waste is a state of mind. “It’s endemic and built into most business DNAs, like the real estate agent who pays hundreds of parking fines every month because he can’t find a vacant parking meter and considers it an operating expense. “said Nucifora. “Understandable behavior, but hardly worth emulating.”