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Don’t be a Cheapskate.

A few years ago I had a client who was a huge cheapskate. He was so concerned about money that he couldn’t see past it to see that his business was failing. The sad thing was his products were actually really good but his store looked like it hadn’t been updated since 1984. It wasn’t dirty, it was just old. He thought that since he had a store and at one time business was good that people will just come back. But the real reason why no one came back was due to his penny pinching.

I was a regular at his store and saw on many occasions that his penny pinching ways lost him customers or cost him even more money.

  • He had a broom that barely had any bristles on it. He refused to buy a new one. After a while an employee brought a new one in. The employee later told me that with the old broom it took almost an hour to sweep the shop. With the new broom it took 20 mins because he only had to sweep places once or twice not 4 times in a row.
  • I saw several customers get turned away because they wanted to buy $3 in product with a credit card, which is rare but it happens. The credit card fees would have left them with next to nothing in profits so they told the customer they couldn’t pay by credit card. Each one of those customers never returned.
  • Some times product was bought just because it was a deal not because it was something that would sell. For as long as I shopped at that place I saw the same product sit on the shelf week after week. I knew that he was making 300% on the product when he sold it, well if he sold it. It took over two years for him to sell every last one that he originally had bought. For two years that product took up a lot of shelf space. If he wouldn’t have bought that product and bought product that would have actually sold but not made him as much money, he could have sold a lot more and would have actually made a lot more money.
  • He worked 10-12 hour days, 7 days a week just to save on hiring a part time employee.
  • He would buy adverting based on the best deal not what would be the best return. He would constantly advertise in small newspapers or mailers that didn’t go out to his target market all because it was cheap.

The list goes on and on.

They dropped my services after business started to drop. Instead of looking at why their business kept dropping. The owner started to penny pinch and cut corners.

  • He cut the hours they were open.
  • He started buying cheaper product to sell.
  • He stopped advertising and marketing.
  • He put up policies that alienated his customers. Like you had to buy $10 or more of product if using a credit card.

Not even a year later they closed. The owner refused to believe that he was in the wrong. Instead of looking at why and where he was losing money. He laid blame and sat there and did nothing.

This all could have been avoided if he had just asked a few simple question,

  • Is this the best way to do what I’m doing?
  • Can I do this a better way?
  • How will this help me reach my goals?
  • If I pay someone else, can I do something better to help my business?

So the next time you complain about not making enough money, ask yourself some simple questions.

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