This may come as a shock to you, but our economy is in some trouble. Inflation is has left its mark, consumer confidence is low, and the supply chain is chaotic. Fun stuff. What does all this mean for you, the entrepreneur? Not much. There is no need to panic. Strong brands and good businesses in our space will do just fine. However, you can use this period to do a bit of self-assessment and reallocation. 

The rest of what I plan to share with you will undoubtedly contradict the advice you often read or hear. I encourage you to rethink your spending and move it closer to the transaction. 

Let’s start with marketing and make some tweaks. How much money are you spending on content creation, mid-funnel, and awareness? What about influencer marketing and PR spending? These are all important efforts, but in these times, for nascent brands, I’d argue that they are more about vanity than revenue generation.

I call the above vanity because it is all long-tail activity at best. Mature brands that have reached saturation online and have achieved significant ACV in brick-and-mortar benefit from these activities as they have a broad consumer base. Emerging brands benefit little. The above doesn’t drive purchase intent, and it is that intent that young brands need. 

Let’s adjust that spending by moving it closer to the transaction. Try your best to spend on things for which you can draw a direct corollary to purchase intent, otherwise known as revenue. Consider shippers, merchandisers, digital coupons, IRCs, and more for brick-and-mortar stores. Put more effort into email marketing and precision performance marketing. 

Forces at work have made this one of the strongest labor markets in history. Limited talent is available, and what is out there is extraordinarily expensive. So what to do? Wait. Unless you find that perfect person, ten out of ten, there might be a better time to staff. Hold off on that FTE. Instead, use fractional resources, lean into the gig economy, or find another shared resource.

Finally, let’s discuss the supply chain. Focusing on COGS is vital regardless of the economic climate. In times like these, it is even more critical. What can be done to maintain or even improve COGS? Could you buy ingredients or other inputs now to avoid higher prices later? Can you invest in larger runs to take advantage of better pricing? One bit of cautionary advice: understand the impact of these decisions on cash. 

Some might have an issue with this article. I am cool with that, as my real hope is simply for you to question your spending. I want to challenge you to be discerning. You’ll likely have to go further and longer with less, so how you spend will be a significant determinant of your resilience. Move that spending closer to the transaction, and I bet you will see a better return. I’d love to hear from you.