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There’s a maddening small business statistic that indicates half fail within the first five years. Year after year, this stat doesn’t change. The reasons for this are as varied as the businesses themselves, but there are certain pitfalls every small business owner wants to avoid. One of these is the costs. There are many needless expenditures that small eCommerce businesses can curb right now and save their operation. Moreover, there are areas you could be spending more on that will actually save you money in the long run. We cover both below.

Excess Overhead

It can be hard to manage your cash flow properly if you’re making needless overhead expenditures. It’s an all-too-common problem—businesses don’t cut costs and wind up going under. The convenience of certain perks like expense accounts and company cars may be nice, but they’re superfluous. As a business owner, even if you don’t have those luxuries you’re still likely to overspend on overhead without even knowing it.

Utilities are a big killer on the monthly statement. Offset your costs by installing smart thermostats in your office, or programmable ones to control the climate. Multi-zone thermostats are also a great way to regulate climate in different areas of your workspace and curb those heating and cooling costs.

Look at every detail of your office and see what you can change. Try to reduce your paper usage. Align the plan costs of essential services (telecom, bookkeeping, cloud storage, etc.) with the actual usage needs (as opposed to paying for full-capacity plans when you don’t need them). You can also update equipment from legacy systems to modern, higher-tech alternatives.

For more info, check out this comprehensive list of ideas to cut business costs.

Spending Too Much on Sales

One mistake many small businesses make is fusing high sales activity with profitability. There is no doubt that investing in upping your sales output can lead to greater profits, but to see those returns, you’re going to need to pay attention to the metrics. First look at your customer acquisition cost—how much money, exactly, are you spending on sales and marketing to gain one new customer. Next, consider the customer lifetime value—in other words, the revenue you will see from said customer throughout the lifecycle.

There are easy formulas to calculate these figures. To learn your Customer Acquisition Cost (CAC), simply divide your total sales and marketing expenses over a single period of time by the number of new customers acquired during that time frame. To calculate your Customer Lifetime Value (CLV), take your average revenue per customer and divide it by your churn rate. If you do this you’ll likely begin to see areas in which you’re overspending, and you can adjust your budget accordingly.

The above are two principal ways you can get your books in order and save your business. However, what you don’t spend money on can wind up losing you just as much money. Here are two prime examples:

Not Investing in BPM Tools

Whether you’re a manufacturing business or an eCommerce retailer, you want to have a solid business process management system in place. Moreover, you’ll need to invest in workflow management software to ensure your tasks are running efficiently and improving your business operation. First, let’s look at the benefits of implementing a Business Process Management (BPM) system.

  • Mitigates human error
  • Boosts efficiency
  • Eliminates inefficient processes
  • Delegates employee tasks clearly
  • Tracks employee performance easily
  • Reduces costs by eliminating redundant processes

That last point—reducing costs—is reason enough to automate your workflows. But consider the other benefits. Adopting a new BPM system will not only improve efficiency and employee productivity, it will also help keep you, as a business owner, stay ahead of the curve.

That’s because these automation suites have typically been designed in collaboration with business owners such as yourself. The designers are putting solutions in place based on real-world marketplace considerations. So whatever experience you may lack can be offset by the experience brought to the table in your BPM tool.

Not Automating Your Social Media Marketing

Social media is one of the three pillars of digital marketing (the other two being search and content). Facebook, for example, now has over 50 million small businesses connecting with their customers via the site. And with over three billion people globally using social media, your business can’t afford to be left out.

Many smaller businesses neglect social media marketing for a number of reasons. They figure all that data harvesting and measuring analytics and buying ads on different platforms is only possible with a large-sized marketing department. This isn’t true. Investing in a solid automated marketing solution can solve all your social marketing problems and then some.

As a small business, you might be wasting valuable time and resources tediously pouring over analytics and buying ads one at a time. Instead, implement an automated solution that integrates with eCommerce sites like Shopify and Magento. These tools will be able to manage all your social marketing, such as posting to Twitter or promoting your products on Instagram. It will then measure the results of your initiatives and present data so you know which campaigns to keep investing in and which to abandon. Implementing a system like this is the best way to ensure your business doesn’t needlessly lose money on social media advertising.


The good news is that all of the risks and bad habits detailed above can be reversed immediately. And by investing in the workflow processes mentioned, you can not only turn around your flagging empire but boost productivity and profits as well.

About the Author

Ryan Gould is the vice president of strategy and marketing services at Elevation Marketing.  A strategic marketing and branding expert, Ryan helps Elevation’s clients solve their problems and achieve their business goals through integrated marketing solutions distinguished by research, storytelling, engagement and conversion. With a proven track record of energizing brands and having worked with a variety of Fortune 500 companies, Ryan is a respected expert in achieving consistent results through creative design, thought-provoking narratives and innovative problem-solving.


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