Expanding Your Business: Spending Money to Make Money


If you own a small business and want to expand your reach, you need to be prepared to spend money. This might sound counterintuitive, but you have to spend money to make money.

This plays out in numerous ways: advertising, loss leaders, and sales events are some common examples of this pattern. How can these initiatives help you expand your business?


Your small business is only as valuable as people think it is. Public relations, word of mouth, and your image among locals are vital to your success.

A business that doesn’t advertise is a business that goes away. You need to reach out to local radio stations and get your business’s name on billboards.

When people hear your company name on the radio or see it as they drive by a billboard, it lends the business an air of legitimacy. Successful businesses advertise, so a company with an ad spot on the radio must be a good place to shop, right? 

Loss Leaders

This is going to sound counterintuitive but hear us out. You might need to sell a popular item at a loss. Your initial instinct is to never sell products for less than you purchase them for, but this strategy is sound.

Restaurants employ a classic example of this tactic, typically selling burgers for cost or slightly under, but up charging for soda and fries. Customers see the burger’s price as a steal, so they drop by the restaurant for lunch. Then, they get thirsty and grab a drink, and snag a basket of fries to round out their meal. 

The burger got them in the door, and then they spent money on items around the burger. This is called a “loss leader,” a desirable product sold at a slight loss to get customers into your establishment. 

Sales Events

Selling products for a high margin of profit is great, but selling through a large quantity of inventory is better. That’s the philosophy behind sales events, at least. If you discount most of your business’s products and advertise the event on local radio stations, you can potentially draw in hundreds of customers for a weekend sale.

Ideally, the event helps kick-start a busy time of year and helps familiarize locals with your company. This can be a pricey initiative, but when it pays off it can help you empty your storeroom and get your establishment flush with cash for the next quarter. Weighing the options and spending money to make money can be the difference between a successful business and a failed one.