#118 Why buying cheap costs more in business
Something I’ve seen a lot is when business owners make decisions based on cost as opposed to quality and what will really meet the needs of their business. Unfortunately, this often costs more in the long run, both financially and, in some cases, in reputation.
Today I’m talking about why buying cheap in business costs more. I share some examples from working with my clients in the context of legal documents, outsourcing to other professional services such as graphic designers and also how buying cheap can actually end up doing your reputation a disservice.
Budget and cash flow are real constraints, but regardless of budget, it’s important to bring awareness to how and where you spend money and make informed decisions according to the values of your business. There will be times when you might choose to invest in something less costly for the short term, knowing that eventually your business will evolve and you will uplevel in due course. In these situations, you’re making a conscious, intentional choice and you know what you’re signing up for.
Unfortunately, it’s when business owners try to take shortcuts by doing things themselves that it can really cost in the long run. This is true for a lot of professional services, and certainly true for legal documents. I talk about the particular use of legal templates and how many clients have come to me for help after having purchased templates that left their businesses unprotected.
I also talk about why we need to make sure that every connection point with our audience is on brand, of a certain level of quality and aligns with the values that we stand for in our business. Otherwise, if you buy cheap when it comes to the content you’re putting out there, it will cost you in terms of reputation.
When you are crystal clear on your values, expectations and what your business really needs, it helps you to target the right professionals and spend your money in an intentional way. Doing this will not only get you a professional result but save you so much time, money and headache in the long run.
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[00:00:00] Tracey: Hello everyone. Welcome back to another episode of the Rise Up in Business Podcast. Thank you for joining me yet again for another episode. If this is your first time joining me, then welcome and if you are a loyal listener, welcome back and I'm so glad that you are here.
[00:00:39] I was listening to a podcast recently, I'm a big podcast listener, of somebody who is very well established in the business space, and she was talking about how to know where to spend your money in business. And one of the comments she made, which really stuck with me was "in what world is the cheapest to the best?" That resonated with me on so many levels because I have conversations with clients a lot about where they're spending their money in business, their legal fees, their previous legal fees, their accounting fees, we cover a lot of things. In today's episode of the podcast, I want to talk to you about why buying cheap in business costs more, and I'm gonna talk about it in the context of legal.
[00:01:27] And I'm gonna talk about it in the context of my experience working with clients. I'm gonna share some of those examples to give context to this topic. So we've all heard the saying, no doubt, by cheap, by twice. And in my younger years I didn't really know what that meant, but over time I most certainly get it.
[00:01:48] There have been times where I've decided that I really wanted something for the house, and so I've bolted out to Ikea, bunnings or something similar. And my husband just rolls his eyes and just holds his tongue and just waits. And sure enough, I've got what I want. Instant gratification. Yes, that's it.
[00:02:05] Fantastic. I needed it today. Bang, I've got it. But give it a couple of weeks and hinges don't work, or the door's not shutting or it, you know, something's jammed, it doesn't work and so, guess what? He then has to go about his business, track down something suitable of a suitable quality and then he purchases that.
[00:02:21] So we had to buy it twice. And I tell you, Full transparency, that has happened to me on several occasions. The same thing goes in business though, and I see it all too often when it comes to legal fees. Let me talk about legals because obviously I can speak from experience with that and I can talk from the heart.
[00:02:40] Clients do come to me and they say to me things like, I purchased a template. But guess what? I'm here with you now. I need this done properly. I purchased a template, I dunno how to use it. I purchased a template and I thought it was great because such and such told me it was great and always the kicker.
[00:02:58] It's a lawyer drafted template that I purchased and 12 months down the track I've got this issue with a client and I don't know how to use my document to help me because it doesn't cover this situation. Or I didn't do things in accordance with that template because that's not how I run my business, but I didn't realise, so I hear a whole plethora of these types of situations, as you can imagine.
[00:03:21] And the reality is they bought something because they made an assessment that it was a good investment at the time. And it hasn't served them, so now they have to come and get it done again. Now there's a difference here, and I just wanna pause here and say I'm not being insensitive to budget restrictions and the reality of cash flow.
[00:03:43] I'm absolutely not. If we make informed decisions, that's very different from going to the cheapest tenderer or purchasing a legal template, for example, because we don't understand the importance of it or the significance of it, and it's just a hundred bucks, so it's just 150 bucks and so therefore that's better valued than spending 1500 with a lawyer, for example.
[00:04:04] That reasoning's flawed, and that's the one, that particular reasoning is what I'm saying here, doesn't serve. Not budget sensitivities and commercial realities when it comes to cash flow. Secondly, when we up-level and we know that we are staging our process and we're up-leveling. I'm also not talking about that.
[00:04:26] There's nothing wrong with that. So we make a decision at one point to invest in something in a particular way in our business, knowing that our business will evolve and grow and we will up-level in due course. Again, that's very different proposition to the, I'm just gonna spend this because it's the cheapest.
[00:04:42] So what I'm saying here is when we're focusing on the cheapest, how do we expect to get the best in our businesses? We are professionals and we are serious business people, and we respect ourselves and we respect our business. So it doesn't follow and doesn't make sense in my mind that we want to charge people for our services, but yet we don't wanna pay for other people's again.
[00:05:09] I'm gonna say it again because I know that this can be contentious, and I know this can be triggering for some people, and that's not what I intend this episode to be. Budget constraints and cash flow realities are real, and I get it. And this is not a criticism of that. It's an awareness. I'm talking about an awareness.
[00:05:26] So if we go out like I do on the weekend to IKEA or Bunnings and we buy something, my husband knows very well that I'm gonna have to buy something else that I've just wasted my money. Because that's by cheap, by twice. That's why buying cheap is gonna cost me more money. Same thing goes with professional services.
[00:05:44] I see it with web designers I've seen it so many times where clients have come along and say, look, do you have any recommendations for a good web designer? I do, by the way. because I just used Canva to do my website or I used Wicks to set up my website and I didn't realise that it was gonna look so poor. I'm not happy with the quality. I've used Canva for this. Canva can be great if you know how to use it, which I don't, but they're just not getting the result that they wanted. they're not happy with the outcome. So they thought that it would be okay to cut corners and spend less, but they weren't happy with the outcome.
[00:06:21] So then they need to go to a professional, experienced web designer, or copywriter, or graphic designer or whatever it might be for their branding or their website or their socials or whatever they're working on because they weren't happy. And so by taking the time to get clear on what it is you want to achieve can serve you very well.
[00:06:43] Because if you've got clarity around what you want to achieve and you're triaging your list of things, we can make better decisions in relation to where our money goes. So if branding's really important, And having a stellar online presence is really important, it doesn't follow that you'll go to Canva necessarily to create that, but it does follow that you'll go to a web designer and you'll invest in that once and once only.
[00:07:08] Same thing goes with legal fees. So when you are wanting to establish your really important foundational legal documents, it doesn't follow that you'll purchase templates or that you'll copy your friends or that you will Google something, dare I say it, but it does follow that you will find a lawyer that you align with, that you have a synergy with who has expertise in what you need.
[00:07:33] And you'll invest and you'll invest once and it'll be done properly. So you won't be one of those clients who's come along to someone like me saying, I've just bought this template, it doesn't serve me. Or, I bought it 12 months ago. It doesn't serve me. And having to pay again. When we are establishing our businesses or upleveling in our business and we realise that we don't want to be a jack of all trades and a master of none, we don't want to learn Facebook ads, copywriting, bookkeeping, web design. I don't wanna learn coding to work out how to do my booking page when we know that we don't wanna do all of those things.
[00:08:11] This is where the planning and getting crystal clear clarity will serve you well in business. Whether you're starting up or whether you've been in business for a few years and you're ready to up-level, getting that crystal clear clarity around what your needs are will serve you well and save you money.
[00:08:27] Because, like I said at the beginning, which is what the podcast host that I mentioned earlier had said, in what world is the cheapest the best? Sometimes you don't want the best sometimes. For now it doesn't matter.
[00:08:39] That's okay. You're making a conscious, intentional choice, and you know what it is that you're getting yourself in for. But when you're triaging your list, if you've got clarity around your expectations and what you really need, that'll help you target the right professionals to help you spend your money in a meaningful, intentional way so that it doesn't cost you more in the long run.
[00:09:00] before I wrap up, I just wanted to talk a little about the consequences of buying cheap and I'm going to talk about the consequences of buying cheap on your reputation. So if you are a professional in business, you're establishing your business, or you're upleveling your business and you're developing your reputation and your online presence, or whatever presence you're establishing yourself as a leader in your space and all the things, factoring in the consequences of buying cheap cannot be underestimated.
[00:09:30] Let's take a classic example, which is the podcast. I have seen too often business owners decide that it's a fabulous idea to launch a podcast because hey, everybody else is, and it's the space to be in. It's a really great way to showcase my expertise and build my brand, but they then also at the same time make a decision to do it themselves, to edit themselves or to go to the cheapest tenderer when it comes to getting quotes for podcast editing. That means more often than not, that when they launch this new fabulous podcast to enhance their brand and showcase their expertise, the quality is poor.
[00:10:15] It sounds lousy, and it has a negative impact on their business and their reputation. So they've just done themselves a disservice. They've actually done themselves a disservice because what they're telling listeners is, I'm not a professional. I don't prioritise quality, or I dunno the difference. And they're all just as bad because if you are thinking about reaching out to engage someone, you go to their website and you have a look, we listen to their podcast or whatever the case may be, if the quality's not there, there's a disconnect.
[00:10:44] And you think, oh, I'm not quite sure I wanna work with this person. It's very easy to move on to the next and keep looking. That's a really, really, Significant consequence of buying cheap, and this shouldn't be underestimated. I dunno about you, but I'm the sort of person and if I turn on a podcast and it sounds tinny or it's echoy, or the editing is so poor, I switched it off just as quickly as I switched it on, and I'll move on to the next one.
[00:11:10] We are spoiled for choice when it comes to podcasts, and we are spoiled for choice when it comes to digital content websites, Instagram pages, all the things, it's very easy to move on. So making sure that whatever methods of communication we are adopting in our business to connect with our audience, making sure they are on brand and that they are of a certain level of quality and integrity that we say we stand for in our business is really important.
[00:11:36] So this again, comes down to not only does buying cheap cost you more in terms of financials, but buying cheap can cost you more in terms of reputational risk and damage as well. and I think that's really worth shining a light on because it's a reality of being in business these days.
[00:11:52] I hope you have found this episode helpful. I know this can be contentious, and I know this could be triggering for some people, and like I said, that was not my intention, but it is a cold, hard reality of being in business that we need to be very mindful of what it is that we are doing in our business and how that is being portrayed to our audience and the community at large.
[00:12:13] If you have any questions or if you wanna share any thoughts with me on that or pick my brain a little more and dive deeper, please don't hesitate to reach out. You can book in a call via the website or send me a DM on Instagram where I spend a lot of my time. I'd love to hear from you. As always, thanks for listening.
[00:12:28] I'll catch you next time.
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