5 Important Cost Areas to Help Your Business Grow

No matter what stage your business is in, effectively managing costs is a critical part of driving growth.

Just when you think you’ve got your expenses under control, a new invoice appears in your inbox, or a line item in your monthly budget is 30% higher than originally expected.

For many of us, it’s challenging to know how to balance these costs between the daily demands of running the business. Here are 5 important cost areas that deserve your attention today and will actually help scale your business.

1. Cost of Customer Acquisition

It’s crucial to understand how much money your business invests for each new customer making a purchase. Often shortened to CPA (cost per acquisition) or COCA (cost of customer acquisition), a business can track its progress over time by how much more efficiently it can acquire new customers. This may be as granular as tracking a Google Adwords spend at the keyword level, or as simple as tracking how many customers came into your store to redeem a limited-¬time offer you printed on double-¬sided postcards. It’s important to diversify your acquisition strategy to limit the risk in your business. Sources for new customers can become more expensive over time, or deteriorate in quality of leads, or completely dry up. Be prepared for the unexpected hiccups by consistently exploring new ways to attract customers.

2. Offline Marketing Budget

[Investing in an offline branding strategy may initially sound like it belongs only in the plans of massive global companies like Coca-Cola or Apple, but it is relevant for a company of any size. It can also be accomplished with a modest budget. Offline branding can be as simple as 4 medium banners with your company logo, contact information and tagline on them or placing a custom lawn sign at every job site your business works. The key is tracking the purchases your business makes every year to increase its visibility. By financially committing to making your business more visible in 2015, you are investing in its growth and dedicating resources to continually generating new customers.

3. Brand Budget

All too often, businesses skimp on building a brand because of the upfront cost and the difficulty associated with how to track its effect on the business. Creating a brand can be accomplished at dramatically different price points, with options ranging from full¬-service creative agencies, to contract graphic designers, and online logo makers that empower business owners to do it themselves. No matter what the end cost, a professional logo design can instantly add a sense of credibility and accountability to a business. Don’t leave this cost area off your annual plan, but do make sure that you set a budget that makes sense for your business. Bonus tip: leverage your logo by integrating it into all aspects of the visual identity of your business offline and online. This includes employee uniforms, signs, menus, business cards, invoices, your website, Twitter account, company Facebook profile and more!

4. Cost of Goods Sold

This is a key metric that may not be applicable to all businesses. When there is a product or good being manufactured or created, it’s critical to account for all the costs incurred when it’s made. This cost must be deducted from the revenue generated from selling the product, in addition to any marketing costs that were spent to drive the sale. You cannot get a clear picture of how your business is financially performing without managing this critical cost area. Expert tip: it may be time intensive to precisely calculate COGS daily or weekly for your business. Save time by estimating COGS weekly and close the books with painstaking detail at the end of each month.

5. Training and Employee Development

Your team is the backbone of your operations. It’s critical to invest in the growth and development of your employees to help your business grow. This can be expensive for your business in the short term. Between the cost of materials and training, and the employee time out of the office, it may be difficult to stomach the costs. But keep in mind that long¬-term, your business benefits in two key ways: as your employees increase their knowledge base, they have more expertise to provide to the business and your customers; and employees who have mentorship, continued learning, and progression in their careers are less likely to leave for another opportunity. Show your employees how much you value them by investing in them.

Dena Enos

Dena is the Vice President of Marketing for LogoMix, a self¬service branding and marketing platform with an online logo maker for small businesses. She has scaled global teams in customer acquisition, CRM, brand marketing, public relations, and social media, with more than 10 years of senior leadership experience.