Ask Dr. Job’s chief contributor, Sandra Pesmen, is a member of the Chicago Journalism Hall of Fame and author of “DR. JOB’s Complete Career Guide.”

Winner of several journalism awards, Pesmen is a graduate of the University of Illinois Media College at Urbana, and is listed in several Who’s Who editions. She also has been Corporate Features Editor of Crain Communications Inc., founding Features Editor of Crain’s Chicago Business and a reporter/features writer for The Chicago Daily News.

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BOOTSTRAPPING BASICS: 5 Expenses to Never Skimp On

WHEN YOU'RE IN startup mode with a new business and money is tight, it pays to know which costs to cut sooner than later.

          “If your goal is to cut costs at any cost, you’re heading into dangerous territory,” says Sean C. Castrina, author of 8 Unbreakable Rules for Business Start-Up Success. “And too many entrepreneurs don’t just wander into Cheapskateville—they set up shop there.”
    Here are five of Castrina’s suggestions of how to do more with less:

* PENNY-PINCHING SIN #1: Paying employees the bare minimum. Excessive tightfistedness on payday sends a very clear message to your employees: “I place a low value on you and what you do for my company. I don’t see you as a person with talents and unique abilities, but as a debit on my monthly expense report.” And that, Castrina points out, is the kind of message that sends skilled employees running for the hills, costing you money in lost productivity, turnover, and customer dissatisfaction.Ask yourself: Would I want this person working for the competition? If not, pay them well and keep them on your team indefinitely.”

* PENNY-PINCHING SIN #2: Using an in-house bookkeeper. According to Castrina, too many small business owners don’t completely know what they’re doing. For instance, they may use unnecessarily broad headings or classify items incorrectly. Sooner or later, your accountant (or worse, the IRS) will charge you to correct these mistakes, saving you nothing.

* PENNY-PINCHING SIN #3: Skimping on legal services. Castrina recalls going through a touchy legal matter several years ago. When he described the matter to an older business colleague, his colleague had this to say: “Your attorney is a nice guy, and he’s good with general matters. But for this situation you need a killer. You need someone whose name strikes fear into the heart of opposing council!”  For matters in which your company’s survival may be at stake, it pays to hire the best lawyer you possibly can.

* PENNY-PINCHING SIN #4: DIY-ing branded materials. “We’ve all encountered a business that made a poor impression because their employees weren’t wearing uniforms or because their signage wasn’t professionally created…and don’t even get me started on forms, business cards, stationery, and websites made with ‘do it yourself’ kits!” Castrina says. “The fact is, customers are always going to judge businesses by their covers. So if you want to be paid like a great company, you need to look like one.”

: Relying on word-of-mouth marketing. Even in this 24/7 world of social media marketing, might sometimes makes right. “If I hear one more small business owner tell me that he or she believes in ‘word-of-mouth marketing,’ I may scream!” Castrina comments. “Don’t get me wrong; customer referrals are very powerful and can really help drive your business. But I’ve never owned or worked with a company that owed more than a third of sales to word-of-mouth business. The fact of the matter is, if you try to save money by not budgeting for marketing, you’ll save your way right out of business. You simply must spend money to attract customers. As an entrepreneur, it’s good to be frugal…but it really doesn’t pay to be cheap.”

Slow Down, Start-Up!

CAREER BOOST: Time to Move up the Ladder