I recently spoke with a franchise company that provides cleaning services. This enterprise has been in business for about 18 months. The company has ten employees, 115 clients and produces revenue of over $12,000 per month. Unfortunately, the company advertising expenses total of $5,000 every month! As a result, company profit only totals a little under ten percent. The owner wants to increase its client base and attract and retain my best employees.

This reminds me of the old saying: "That you have to spend money to make money." Do entrepreneurs have to spend money to make money?

Well, some believe that there are only two ways to increase your profits. Either you reduce your expenses or increase your sales! Believe it or not, you could do both! Some entrepreneurs think that you only have one choice - spend money! Most new owners make the same mistake when starting a business. They think that the best way to build a business is to spend money. They think that to make money, you must spend money! They are wrong.

Thinking that it is an investment, some people spend a lot of money in the lead generation activities. Some owners will buy a yellow pages ad. Others will purchase an ad in the living section of the local newspaper. Also, you will discover that some people will buy a direct-mail list of 1000 prospects or post a gigantic billboard over a major highway.

For example, I know of one business that spent $ 20,000 on one direct-mail campaign! They are still waiting by the phone for all the excited new prospects to call them and hand over their hard earned money! It did not happen! Another example is a local restaurant that spends $2,000 each month for a billboard! Business has improved and the owner is thrilled. But, when I asked her to prove that her sales came from the billboard ad, she could not!

Always test and measure your advertising efforts, processes, procedures, and systems. Always verify your results! Before spending a lot of money, make sure that it is a smart investment of your dollars and not a wasted expense!

As for your situation, advertising can produce amazing results and great revenue and profits --- for the ADVERTISER! Unfortunately, the dollars that you spend in advertising, you will never see again! That goes into the advertiser's pockets and not your own! There is a major change happening in America. Why do you think that local newspapers and the major broadcast channels are losing money and firing employees? Many companies are not seeing a positive return on investment (ROI) using traditional methods.

They are getting wiser with their dollars. You should too! Companies that have satisfied clients and customers, should recognize what a valuable asset that this can be! That's GOLD! Start there! Chances are that your satisfied clients know other prospects that you could convert to your service! That is where you should invest your money! Get closer to your clients! What is a referral worth to you? How many referrals did you get last month? What is your referral system? Learn to ask for referrals!

Stop wasting your dollars on advertising! Begin to think of other ways to attract the right clients and customers!

Get profitable! Be more productive and efficient! Employees will stay with a successful company. Retention will increase and employee satisfaction will improve! People will leave their existing jobs and look for better opportunity with your company.

As you generate more dollars, you will have enough money to invest in your employees! This could result in offering health insurance, company training, retirement plan etc. Investing in your employees will produce a better return on your investment. This will have a positive impact on company and likely result in better employee retention and satisfaction. Save money and invest in your company! Do not give it away!

Do you have make spend money to make money? No! Business owners just have to become wiser with their money! That is the bottom line!