A wise man once made a sound observation that disappeared through the sands of time. He said the purpose of business is to create a customer. Then it follows that business has only two basic functions. These basic functions are marketing and innovation. Both of those are what produce significant results. “All the rest are costs. Marketing is the distinguishing, unique function of the business.” That was Peter Drucker. He invented the leadership jargon and strategies we use today for business networking such as “decentralization” and “knowledge worker”.
He was an advocate of a more flexible, collaborative work environment. And the efficient distribution of power across the board. For his work, he became known as the father of Management Theory. But what happens after you’ve done all the reductions? Where do you go from there?
Why Businesses Cut Costs
Businesses cut costs for a number of reasons. Leases on office spaces affect all businesses, depending on the real estate situation in the area. Running a contract or service-based business comes with transportation costs including gas and repairs. These will impact your operations in a huge way. If you run a business in the food or manufacturing industries, even just pennies saved on wholesale supply costs can make a difference.
There are also costs on advertising and marketing– flyers, posters, signages and trade shows. The Manifest surveyed 529 small businesses and found that for 2019, 37% of small business owners spend at least $10,000 on marketing and networking. A bulk of the findings by business groups report that small businesses spend at least 5% of revenue on advertising.
Depending on the size of the business and the industry sector they fall under, this number could still go up. This is especially true for small businesses or for startups, who are only beginning to spread the word about their brand. As a business owner, you are constantly keeping a watchful eye on alternatives and more economical approaches to maximize your operations.
Progress and Innovation
Drucker said “All the rest are costs…” he meant that if business enterprises are not progressing towards the direction of developing ideas, it is not serving its purpose. When you’ve shaved off the fat, when you’ve reduced the enterprise to its basic anatomy, what happens?
An approach that could be adapted is to look at all the components of your business and assess which areas you could bolster more efficiently but not the cost of sacrificing opportunities for your company.
The Cost of Missed Networking Opportunities
One of these areas is networking costs. What most people don’t know is that when reducing costs, it’s not just financial costs that need to be considered. It is also the cost of missed opportunities. “Opportunity costs” is just a fancy term for “trade-off”. For every choice you make, there is a compromise that you need to make. To make these decisions, in the same manner that you think about what you are gaining, you also need to consider what you’re giving up.
Networking at Trade Shows
When you attend a trade show, you gain the benefit of exposure. Trade shows contain large venues, big crowds, hundreds of companies and thousands of industry professionals. They come with the promise that if you attend, if you swim among the fishes, you leave the tank with more connections and the word of your company having reached certain corners of the industry it wouldn’t have had you not attended in the first place.
But when you attend a trade show, you are also giving up time and convenience. You have to be physically present. You need to take into consideration the travel time, the expense of accommodations, and the logistics of getting your team onsite. Not to mention the booth set-up and outsourcing a team to get everything up and running.
Many industry attendees from small businesses often take time out of their own schedule. There is often little motivation to take valuable time that can be spent more productively, just to make the effort to be present. All of this happens only to be immersed in a limited environment. But there are thousands of industry attendees, how is it limiting? It is limiting, because you are only getting access to the people and organizations that are there and whose companies are registered with the trade organization. The size of the trade show environment is also a disadvantage especially to small to medium-sized businesses, which is an added challenge to networking.
Solidify Your Brand
Solidifying your place in the industry prevents you from getting stuck in a marketing bottleneck. Many large companies may be prepared to interact with smaller businesses and startups but unless they’ve really heard of you, they might not be prepared to engage in a business-to-business conversation. Having significant conversations where you successfully convey your brand’s meaning are rare. So with a narrow set of individuals and businesses that you make a connection with, at the end of the event, you now have to narrow down the set even more, which can become tedious.
Ultimately, opportunity costs are the result of a question. What’s the next best thing you can do had you not made your first decision? What’s the next best move you could have made had you not attended a trade event? SeeBiz is here to help you make that choice.
Re-Strategizing with SeeBiz
As the world’s first social networking platform for small to medium-sized businesses, SeeBiz consolidates the process of marketing and networking by giving you a space to interact with a global network of industry professionals from suppliers, manufacturers, distributors and retailers. SeeBiz is meant for businesses to directly engage with each other, without the help of third-party organizations. It was created with your business and expanding your network as its cornerstone.
Networking and marketing can just as easily be incorporated into your routine by using SeeBiz. Making it possible for your business to create a larger impact in a digital ecosystem that has a worldwide reach.