For small business owners, revenue is a terrible commodity to squander

For those who work hard to attract high-paying clients, consider the fable of how a hungry grasshopper asks an ant for food when winter comes. The situation summarizes business lessons about the virtues of thrift for the future.

For the ordinary business person—the sub-chapters S entrepreneurs, agency owners, consultants, business coaches, small business owners, and sole proprietors—every dollar spent has a ancestry that can be traced back to its source. That dollar spent has to be earned first, according to Fortune 500 and large agency marketer Alf Nucifora.

“Think of what you have to sell to spend a dollar,” Nucifora said in a phone interview. “Think five to ten times harder when working with standard margins. Then reconsider the purchase. Seen through this prism, cheapness becomes more of a distinction than a badge of mockery.”

Cheap is such a harsh word; I prefer frugal. As another business mentor taught me, if you own the company, you get to keep every dollar you don’t spend. Like Aesop’s fable of the ant and the grasshopper, you might need those dollars on a winter’s day.

“While the headlines scream wealth gone wild — tech billionaires with multiple private jets, swanky seven-figure wedding receptions for favored daughters, massive yachts demanding millions in annual operating expenses — compare these outliers to animals in a zoo: an interesting species, flamboyant behavior, albeit not in plumage, but requiring nothing more than voyeuristic interest,” Nucifora said.

Nucifora is the Chairman and Founder of LuxeSF, which spans the entire Bay Area including Carmel-Monterey, Silicon Valley and Napa-Sonoma. He is also currently the director of a marketing consulting firm. We met before he “retired” in 1990 from his responsibilities as chairman of the Southeast Office of a $310 million advertising agency.

“As a practicing small business owner and operator for more than 30 years, there are fundamental spending imperatives that should be taught from an early age as an antidote to the relentless consumer messages that permeate mainstream marketing communications and popular media entertainment,” said Nucifora . “Take it from a still-working boomer who once spent with abandon because it felt good: I wish many of those lavish dollars could now be reclaimed.”

Here are some reasons from Nucifora for economical management:

There is no such thing as perfect information. “So stop looking for it or buy it. Be prepared to make a business decision based on available information and your own accumulated wisdom and experience.”

Beware of creeping break-even. “It’s an old economics professor Admonition. It means you always strive and promise to achieve profitability with the best of intentions, but the lures to spend always seem to thwart those intentions.”

Appoint a Scrooge. “We have our Scrooge and proudly promote their brand. She’s a constant pain and her need for spending justification drives the sales guys insane. But she saves us a fortune. And it covers those situations where we offend by saying no to people who were afraid of being offended.”

Take care of the pennies and the dollars will take care of themselves. “A prominent regional bank executive would check the reception desk every day as he left to see how many FedEx packages were stacked for pickup. Inevitably, he found that many could be mailed, saving hundreds every week and thousands every year.”

Micromanagement with skill. “Micromanagement has gotten a bad rap for itself lately, the tech prodigies at 30,000 feet preaching about the view, big and long. Remember, God is in the details, especially for small businesses where every customer and every transaction really counts.”

Do your homework. “Be prepared to shop the prize. That’s the beauty of the internet. Someone is always offering a better deal or a cheaper price.”

Go for the repeat dollar. “Yes, we need new customers and new dollars, but iterations are easier to acquire and deliver more profitability. But most of the business world, especially the service industry, forgets about the customer relationship once the first transaction is completed.”

Nucifora, a native of Brisbane, Australia, entered the advertising and marketing business on the corporate side, working for two Fortune 500 companies, first in Australia and then in the United States. He then switched to the advertising industry and later rose to agency management.

Throughout his career, Nucifora has learned that waste is a mindset. “It’s endemic and built into most business DNAs, like the real estate agent who pays hundreds in parking fees every month because they can’t find a free parking meter and considers it a business expense,” Nucifora said. “Understandable behavior, but hardly worthy of imitation.”

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