We want to help you save money. Really, it’s that simple. Who couldn’t use a few extra dollars in their pocket, especially in this economy?
So we’ve enlisted the help of several small business owners who know a thing or two about cutting costs and increasing profits. (You can thank us later.) This round of advice comes from Bill Balderaz, founder of Webbed Marketing in Columbus.
In five years, Balderaz has transformed Webbed Marketing from a one-man consultancy to a company that employs nearly two dozen people who help grow businesses through the application of Internet resources. Oh, and if honors are any indication, Balderaz certainly knows what he’s doing.
In 2010, he was named one of the “Forty Under 40” to watch by Columbus Business First, as well as “Hispanic Businessman of the Year” by the Columbus Hispanic Chamber of Commerce and “Marketer of the Year” at the Ohio Interactive Awards. One year earlier, he was named the “Small Business Leader of the Year” by the Columbus Chamber of Commerce.
Without further ado, Balderaz’s words of wisdom:
On cutting unnecessary spending from your business budget
“We’ve always believed in investing in our employees; they are truly our greatest asset. This year, rather than cut spending, we actually increased spending in some areas. For example, we awarded raises well above the average cost of living raises, we doubled our training budget for employees, and we added more benefits, including dental, a matching retirement plan, life insurance, and disability. While in the short term this will cost Webbed Marketing, over time it will pay off greatly.
“That said, we do a good job of controlling spending in other areas. We keep our overhead quite low. We make use of technology to cut costs. For example, since our clients are coast to coast and around the world, we use GoToMeeting and host meetings, rather than travel. We use free Google tools, like Google Talk, Google Calendar, Google Voice, and Google Docs, rather than licensed products. We use company-sponsored mobile phones rather than an expensive phone system. We use an open collaborative work space rather than offices and cubicles. And we use software− a lot.
“We license enterprise level software packages that we use for everything from project management to media outreach. Some of these packages cost us as much as hiring a full-time employee. However, they ultimately save us money. We automate tasks like sending invoices and tracking leads, so that our employees can spend time doing what matters: serving our clients.
“Oh! There is one area we are cutting: sponsorships. Over the last few years, we spent a lot on sponsoring conferences and tradeshows. The return just wasn’t there. So this year, we are only sponsoring events hosted by our current clients, by organizations we strongly support from a community perspective, or shows that have generated leads for us in the past.”
On using technology to eliminate expensive and outdated practices in your business
“People are shocked to learn we serve 60 clients with 20 employees and that we are known for our responsiveness and service. How do we do it? We automate the things that can be automated and save our brain power for the big things.
“People are also shocked to learn that we licensed the type of software that larger companies cite as too expensive and we build our own tools as well. Without question, the no. 1 mistake I saw businesses make during the recession is “saving themselves into bankruptcy.” They didn’t invest in the right tools. Then their employees had to work on things that a robot should do. That means employees were pulled away from high value work, clients were unhappy, and things fell apart. I can think of a half dozen companies in Columbus that fell into this trap.
“What software do we use? We use Vertabase to manage tasks and projects. We use Doorbell to manage new business. We use QuickBooks for accounting. We use Vocus for media relations. We use a customized social media tool for tracking online conversations. We use a customized SEO reporting tool. We use GoToMeeting for online collaboration. We use GoToWebinar for online training.
“In fact, after payroll and benefits, technology is our biggest expense. But every one of these tools makes us more profitable. My advice? Hire the best people. Pay them the highest salary you can. Give them the best training. Give them the best tools. Does this cost a lot? You bet. Is the return worth it? Absolutely.”
On streamlining his business model to refocus on the bottom line
“One of the boldest moves is saying “no.” There is a high demand for search, social media, and mobile marketing services. We’ve learned what clients are the best fits. About 50 percent of the leads we receive are not good fits. Is it hard to walk away from business? A little. But we’ve learned that bad fits don’t pay a dime. In fact, they cost quite a bit!
“Having a bad fit with a prospect or client means sales cycles that are too long, a relationship that won’t work, and churn. Churn is expensive. Today we have a 94 percent client retention rate. I want to keep pushing that higher by keeping our clients happy and only taking clients that are the right fit.”
A final thought…or four
“Invest in the best you can. That means the best people and the best tools. Look for new opportunities. Don’t rest just because things are good. Work to keep them good. By the time things turn bad it may be too late. Look for a need you can fill that has high demand and low competition.”
Which tip did you find most helpful?