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Being Miserly Hurts in the Long Run
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For some reason, I have recently been exposed to several situations where I find people or businesses in dire straits, with those dire straits all being caused by one singular attitude. That attitude is being, as we used to say, "penny wise, but pound foolish."

There is a fine line between being wasteful and being too loose with the money. In most of my career, I would have to say I have observed more harm caused by being miserly than by being wasteful. For instance, over the years when I have been involved in advertising or marketing, I have had prospects ask me this question or one similar to it: "If I spend x dollars putting an ad in y magazine this month, how much new business will that get me?"

The response?

"That's easy: none."

Advertising doesn't work that way. In fact, I may just write another one of my little books these days and call it: "Business-to-business advertising doesn't exist -- it is all retail."

Advertising pays huge dividends when you are as many places as you can afford to be. The same way with contracting, especially with construction contractors. If you try to play fast and loose with a construction contractor by being too miserly, one of two things is guaranteed to happen. The honest ones will go out of business, because you didn't pay them enough to make a profit and they were too honest to cheat you to make it up. The dishonest ones will find ways to extract far more from you than you thought you saved.

Take your choice if you want to play the miserly game. The biggest losses from this foolish behavior, however, happen with employees. If you promise employees that the salary cutback was just temporary and you will revisit it in a few months you better live up to your word. If nothing else, acknowledge the date and say, "Sorry, things are not quite there yet, but we will visit this again in another z months." And then do it.

Not keeping promises with employees is the surest way to lose the best ones quickly, for they can find a job elsewhere. You will end up with a corral full of lame ponies, so to speak.
 


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