Purchasing mistakes for small businesses

Vostro 1000 with Windows 8My salad days, when I was green in judgement

Remember when you started your business, whether it was a few months ago of a few years? You wanted to buy computers, tools and gadgets. You needed to buy in services. There was so much choice, but what did you need?

When I started my business more than a decade back, the web was not quite what it is now. It seemed logical to advertise in paper form. Not long after I started up I had calls from Yellow Pages and Thomson Directory. I signed up at quite considerable cost, by which I mean £1,000. I thought it was bound to work.

Of course just being in a directory does not work for every business. I wish I had known that. It does work for a plumbing business for people in urgent need of help, and probably for the local electrician, but in professional services potential clients look for recommendations. I might have had one engagement in my three wasted years with Yellow Pages. I had no business at all through Thomson. I had the wrong sort of business to succeed this way.

Out with the old, be careful with the new

Now paper directories have gone out of fashion and have shrunk to small booklets., but still general directories do not work. We are all in Yell.com for free, and having your business listed in Google Places probably helps your SEO, but in themselves they do not help service businesses much. It is certainly not worth paying anyone for a big ad on Yell. AdWords may get you more clicks on a search, but you just cannot beat a recommendation, so don’t spend your money unless you are a plumber etc..

Shiny jewels

Our other big temptation is in buying office equipment. What do we actually need, as opposed to what we really fancy to polish our egos? I run a “professional office” from home. I would love one of those wonderful big touch screens as a client of mine had even a couple of years ago. She paid about three times what she needed to to have a functional machine running bookkeeping software and spreadsheets. Paying for that really cut into her cash-flow as a start-up, at a time when she needed to purchase stock to sell.

I have a couple of Windows desktops in my office and an old ex-Windows one running Ubuntu and which I did not fork out a bean for. I am tied to Windows by specialist software, at least for now. I have a laptop which I take when I am out of the office. I need all these.

I also have a netbook which was an impulse buy a couple of years ago. I didn’t need it. With hindsight I should not have bought it, but I liked the one my granddaughter had. I use it for business purposes because it has no other use for me, but I could well have done without it.

Taking the tablet or swallowing a bitter pill?

I am not the only one to make these mistakes. I might have bought a redundant iPad. And yes, I have an Android tablet which, fortunately, was a freebie. I could write letters, work on spreadsheets, emails and all sorts of things, but without a proper keyboard it is not nearly as convenient as a laptop. I sometimes check my email when I am out, but can just as easily use my phone. I don’t need a tablet at all. I use it only on Twitter and Facebook and then only during leisure time. Paying for one would have been a waste of money.

All new purchasing needs thinking about carefully. Do we need the product and will it serve us well? Is it cost-effective? Have we read the reviews or asked a business friend?

I have made expensive mistakes in the past. Have you?

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False economies and part-timers

Following on from my last piece, at Christmas those with jobs may well be off work for a week or so, and students are home for the holidays. They may have some time on their hands and be thinking about earning extra money, which is when some of us might be tempted to ask them to help with a project, thinking that they will charge less than if we hired a full time professional. Oh the temptation to think we could gain whilst at the same time helping someone with a little pocket money!

Of course I am not against a bit of charity, but what happens when our part-time bookkeeper goes back to work in January having left a job half done with a well-intended promise to find a few evenings to finish off? What about our student web-designer or graphic artist disappearing for ten weeks or so back to college or Uni with real study to do plus the social distractions of student life? Will our project get finished and will it be satisfactory?

Let employees at a loose end help out with something which doesn’t need them to finish it, and give the kids pocket money, but employ a full time business with recommendations and a track record for anything important to your business.

One of my friends once recommended a young student to design a logo for me. He didn’t have a clue and could not come up with a design that was even web-friendly, let alone good for a corporate image. I wasted my money. Do you have any tales to tell, or have you been too sensible or lucky enough to learn from the mistakes of others, rather than your own?

© Jon Stow 2009