Running a successful small business is essentially the same as running any other organization. Constantly monitoring incoming payments and outgoing expenses to make sure you’re turning a profit is essential no matter how big or small the company. Nonetheless, the fact is that small businesses tend to face many more challenges due to their smaller budget, and your ability to successfully navigate these challenges can directly determine whether the company sinks or swims.
Running a business on a small budget doesn’t have to be all that difficult, but it does require that you think much more carefully about every purchase and, essentially, count every dollar you spend. The problem is that many companies end up shooting themselves in the foot by continuously choosing the cheapest option even in situations where it obviously makes sense to pay a bit more. For instance, a company which decides to print their business signage on foamboard instead of more durable Dibond will probably end up replacing their signs several times within a span of ten years, whereas a Dibond sign will easily last a decade or longer. Saving money at the onset does not justify the expense undertaken in the long-term.
In this sense, it often helps to understand the reasons why durability is generally always a more important factor than price when it comes to buying equipment and other essential items for your business.
Towing the Line between Quality and Price
When your business is dealing with a limited budget, there will be many situations where you simply can’t afford to go with the best and most expensive option. Similarly, there will also be plenty of times where buying the most expensive model or brand simply doesn’t make sound financial sense. Of course, the exact same holds for buying the cheapest possible products as there are only a very few situations where this ever makes sense either.
What this means is that it’s up to you to try to find the ideal balance between price and quality. Essentially, this involves taking into account your budget, the overall importance of the item or equipment for your business and the total costs you could face should it break down or need to be repaired.
Understanding the Full Costs of Equipment Failure
In some ways, choosing durable equipment, materials and other essentials can be more important for small businesses than it is for larger corporations. Operating on a smaller budget generally means a much finer line between profits and losses and thus between success and failure. Basically, your margin of error is much smaller since one mistake can have a much more damaging effect on your company’s bottom line. This is precisely why they say that sometimes you have to spend money to save money.
For small businesses, this means making sure that you understand the full cost of any equipment failures and repairs that could result from choosing a cheaper, inferior-quality product or piece of equipment. More expensive equipment tends to be of higher quality. This usually equates to better durability and an overall longer lifespan, which can be essential for your small business since there probably isn’t much room in your budget for constantly repairing or replacing equipment.
Nonetheless, it is also important that you take into account any other potential losses you may incur any time a necessary piece of equipment needs repaired or replaced. You might find yourself missing important deadlines or needing to rent the necessary equipment, and both can quickly cut into your profits. Employee downtime and loss of productivity is also important to consider. When you add up all of these other possible costs, it should be obvious why it’s usually best to spend a bit more money on a higher quality item.
Overall, the benefits of quality almost always outweigh the initial savings you get when you buy a cheaper and ultimately inferior piece of equipment. Better quality equipment often comes with a better warranty or does the required task safer or in less time. In this sense, it really is true that you get what you pay for, and this is something anyone running a business on a budget always needs to keep in mind.