People are fond of saying “You have to spend money to make money” but you must be sensitive to things a small business shouldn’t waste money on.
While that’s generally true, unfortunately many owners say this right before they are about to bust the budget on an unwise expense.
When money is tight, or you’re just starting out, it’s especially important to allocate your dollars wisely.
And it is very important to avoid using credit for any items that are not absolutely necessary.
Here are ten things a small business owner shouldn’t waste money on and probably do not need:
Table of Contents
Custom Websites
There are a lot of fantastic template-based websites available at reasonable prices.
Most new enterprises can get away without hiring an expensive designer.
One I have heard amazing things about is Wix which is great for a “Starter” website.
But consider the extra work to invest in and convert over to a more robust website platform.
We use WordPress because there are thousands of free useful plugins that you cannot get for a Wix website.
GoDaddy offers economical hosting packages with free WordPress themes and templates that can be setup and running within a few hours.
Once your website traffic grows in size you need to consider transitioning to semi-dedicated or dedicated hosting.
Your website is an effective long term investment and will serve you for years and years.
In fact, your website should be your first major investment because
Don’t worry about the process as many premium hosting services will manage the transfer for you FREE.
Don’t forget that Hosting doesn’t have to be expensive either.
TOTS uses 37Solutions.com and we couldn’t be happier with our cost or the service we receive.
We use GoDaddy to host our domains and its worth investigating a GoDaddy hosting alternative.
Expedited shipping
Can you wait another day or two for that box of inventory or supplies?
With some planning the answer is YES!!
Save yourself some money and avoid high shipping charges, unless you absolutely must have the items within the next day or so.
Print Advertising
Many businesses advertise because they have been told they should . . . mostly from sales people telling stories selling advertising.
There are so many methods to promote your business through Facebook, Linkedin, Twitter, Instagram and Pinterest that are free.
And you can learn more with our free eBook offers below.
If your sales are growing, customer marketing strategies are working and the pace of business is comfortable for you, don’t go out and buy ads just because you have been told it is “the thing to do.”
Advertising is definitely one of those things a small business shouldn’t waste money on.
Advertising without a plan
They are told the popular thing to do is print glossy brochures, buy newspaper ads, purchase a radio spot and then wait to see what happens…if anything.
They’re often a waste of money.
Ads work best when you have a clear purpose in mind, and you can track them to see if the desired result is obtained.
Overpriced postage
You don’t need to sign up for online month to month postage services spending money on meters that you rent by the month.
A cheap digital scale can be purchased for as little as ten dollars and you can easily print postage with no added fees from Paypal as we described in this post.
These are things a small business owner shouldn’t waste money on.
Office supplies that you’ll never use
Not every business needs paper clips, staplers, hole punches and stackable trays.
We only buy one ream of paper at a time and always think twice before we print something.
Today you only need to save receipts for tax purposes.
All other records can be saved digitally in the “Cloud” so avoid filing cabinets to reduce costs.
If you subscribe to Office 365 you get 1TB of Cloud memory free on a service called OneDrive.
They have an App for your handheld device (phone and tablet) that allows you to access your files.
Google gives you 15GB of free Cloud storage on Google Drive with your Gmail account.
Make a list based on your actual needs and don’t be pressured into buying bulk or paying store membership fees if your starting budget is very slim.
Buying or renting space you don’t need
If you can work out of your bedroom or any other place in your home that offers some privacy, do it.
If you can cut the cost of voip calls that will save you from wasting money.
It’s not glamorous but oh the money you will save!
To keep your work environment fresh use other work space resources like Public Libraries and Coffee Shops.
Promotional items that don’t translate into sales
Personalized tote bags are cute, but will they really sell more of your products, and do really want two hundred of them to hand out?
Promos can work, but choose the item(s) very carefully, be mindful of your budget, and have a plan for placement and distribution.
All new stuff
When just starting out, it is tempting to get new clothes or some new furniture or maybe even a new computer.
Don’t do it!
Just be patient and save your cash for now.
Use the stuff you already own and concentrate on developing, marketing and SELLING your great new product or service.
If you do need something, check Craigslist or post a Kijiji request.
Software
You can create amazing graphics for your website, blog or Facebook page without Paint Shop Pro.
We use Canva.com for design on a free plan and Depositphotos.com for stock photography.
Most starter Tax preparation tools are free with upsells for submitting your tax return electronically.
Sumo.com has a special once a year – 100 photos from Depositphotos.com for $50.
The same goes for accounting programs.
Simple, cheap and even free programs, saving you a lot of money, is all you need in the beginning.
I know many owners and bloggers who just use spreadsheets.
Some programs, like FreshBooks, offer a free trial so you can try before you buy.
Many small businesses advertise in a very haphazard fashion because they DO NOT have a strategy or a goal which is certainly not the best successful small business ideas.
How have you been saving money?
Are you using a budgeting system?
Are there any mistakes that you’ve learned from?
What things things a small business shouldn’t waste money on on did you find?
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Promotional products can be a big help for your business. Getting your logo on the products is worth the effort since this is one way in which you can build brand awareness.
I agree, Dave, as long as it’s done purposefully. Eventually, you want it to translate into sales. Not all promos do this, so choose wisely, and be aware of the minimum orders that are often required.
Most of these are things new small business owners tend to do. I will say it’s mostly part of the excitement that comes with owning your own business. However, a few hasty spending that bring no profit or cuts deep into your capital or running cost often help people to look closer before leaping, great post.
As a work-from-home type myself, I agree it’s hard when you’re first beginning to avoid lots of expenditures. Not only do you have pressure from people and businesses around you, but being involved in something new just naturally makes you want to buy the newest and the best.
I know you are pushing blog advertising, but each business has to think of who their market is and use repitition and consistency. What does that market look at each day? Many businesses do not put enough thought into their advertising. You can’t just buy a small ad and wonder why it didn’t bring droves of people to you. Businesses use campaigns. I used to be in advertising and it was so frustrating to try to help many businesses understand that they need to market their business. Think about all ways of connecting to your public. Don’t rule things out just because you do not use it. I just feel like passing this information on to small businesses. I want to see them succeed.
Great tips! I used to sell craft things from home. Having a mailing scale and using Paypal to print shipping labels was not only inexpensive, but a time saver!
I’m pretty frugal so I don’t purchase frivolously. These are great suggestions though.
Some really great ideas here, but I think promo items do help get your name out there.
That’s true, Wendy, but I wanted to mention it in the post because not all businesses can afford them at the beginning, esp. when most companies require a certain amount to be ordered at one time. And if you don’t buy the right promo items, then you’ll get stuck with a lot of stuff that’s hard to get rid of.
Great suggestions although I do believe in you have to spend money to make money. Problem is spending it in all the wrong places and I believe you nailed most of them!
Well… some of these we are gonna just agree to disagree 😉 I dont think spending the money on advertising/promotional stuff is wrong – however not UTILIZING said products and focusing on the relationships you can make from them is wrong. I too believe you must spend money to make money – but spending wisely of course is key.
These are some great tips! There are a lot of companies that prey on the little guys and try to sell them all these items they truly do not need.
Buying or renting space you don’t need. <—- THIS! There have been so many times I've thought, "It would be nice to have that small office on the corner," but then I have to rethink… There's no way I could justify renting an office space to STORE stuff that I can store in my shed or garage, and I would have to be there 24/7 just to make enough money to PAY for it!!
Great post.
This is a great list of tips. Sometimes small businesses just don’t know where to go or where to begin.
I have seen too many small businesses open up and then go out of business within the first year. I wish every new business woud read this!
I agree many pay for site designs and such that don’t really add to their bottom line
Renting space is a definite no-no. Great recommendations!
I often dream of a fancy site redesign, but you are right. If I take a few minutes to tweak here and there I can get close to what I want and the feedback from reps is as nice as if I’d spent $500.
It’s definitely important to spend wisely as a small business. I’ve learned that myself and while I do have to spend money to make money I definitely focus on not wasting money!
Advertising without a plan is a huge one, I have seen many small businesses lose money this way.
These are great tips. I really try to look at our spending as a business. Some days it is so hard to manage all of the expenses.
Great tips for homeschoolers, too, not just business owners. LOL
I agree on the promotional items. Frankly, I get tired of seeing them from businesses and most of the time they just get thrown away … unless it’s a pen.
So many small businesses fail these days. These are very good pointers for all to consider.
I disagree on custom websites, I think they are important
Custom content and good SEO and much more important than a custom site and really depends on your business.
Promotional products definitely require some research because as you said, you don’t want to spend money on promotional products that are designed to get you more sales. But, if done right, promotional products can be a great way to acquire more customers. The key is to keep it simple and to have a plan. Thanks for sharing!
All those are true and as someone said in a previous comment come with the excitement of building a new business or it’s just to do like everyone else. Let’s say you have this friend you know who invested in branded merch and it worked for him. The problem is you want to do the same but you can’t without a plan that will work for you.
That’s why I have a hard time with growth hacks sometimes, they promise outstanding growth if you apply a precise technique. But the secret is to do something that’ll work for you and your clients.
I thin a custom website is worth investing in, especially if your product is unique. I wouldn’t want my website to look like a majority of my competition.
It definitely depends on the site and what your budget and goals are. With the thousands, if not millions, of templates available (some of which can be easily customized by the end user) it’s not hard to get an affordable site that’s still unique.
Best to choose a useful product then to avoid wasting money on promotional items. I still believe they can work for a business, create a buzz in a way.
I think that is a valid point. I do not need any more junk but if its something I use I will be more apt to notice the company who supplied it.
This list is great. It really is tempting to go out and get all new things, and everything you “think” you will need. I will be holding off on a number of these until my business is profiting well.
I would add that a small business does not a big pricey merchant account with First Data or similar. Square and Paypal can take care of all online, face to face, or invoicing needs you would have. And, without contracts, minimums, and monthly service charges. Also, going this simpler way with merchant accounts pretty much guarantees that the website you start yourself will probably already have an interface (payment gateway) built in. Keep it simple!
I agree Anne. I am an entrepreneur myself. And it pays to lie low in the first year or so. I have recently started blooging about my journey to entrepreneurship. Do read it at
Would love to hear your comments 🙂
These are great tips! I run a successful small business without spending a fortune on a website, millions of promotional rubbish and advertising. Providing a good service to get good word of mouth is worth more than all of those things put together!
A lot more goes into success than just the tangibles. Firing up your people skills is very important and can make or break any business. If you don’t like people or have a nasty habit of being rude and uncommunicative—then any self-employed enterprise isn’t for you. Bad attitudes are very noticeable, even from the other side of a computer. Add to that keep your personal opines regarding politics, religion, et al out of the business. Many have failed because of that one small factor which gets regularly ignored.
Great article, it will be very useful to those who hope to open a small business or those who have already opened it. I am sure that the question of what you need to spend money is very important for those who have just opened a business. I would expand this list slightly to 15 points. But in General, the article is very good.