Succeeding in business may not only be in the products you sell or how many people know who you are, but can also be in when you choose to spend or save. Being good at managing the various aspects of running a business including choosing the time to spend can affect your financial results immensely. A lot of major players in every industry have closed for good because they fail to control the money flowing in and out of their companies or even spend at the wrong time!
Whether you run a small business or are just starting to plan for one, you should never under estimate the impact of spending /saving financial decisions. Here are some instances where you can benefit from spending rather than saving:
The Start up plan
If there is one time in your business that you need to be spending, it will be when you are starting. I’m not saying you have to spend big but you do need to allow and or plan for what is required to start your enterprise to give it the best chance of success. This could be marketing / advertising to drive customers or even something as simple as the computer or paperwork you need to function properly. Imagine not buying accounting software and having to spend a fortune on accounting fees to sort out a mess at the end of the financial year. Can you afford not to spend on that to save later?
Tools and Equipment
Quality is always a priority unless of course you don’t plan to be in the business for a long time. Major tools you need to make your business function should not settle for something less than what you would expect other business/trades people to use on your behalf. The old adage “pay cheap pay twice” applies here. Considering insurance on expensive items is another of those should or shouldn’t I spend questions!
Whether you need a team or run a one-man business adding more skills to the ones you have means you are better at what you do and in theory can charge more. Investing in training or resources that will enable you to become more efficient, get more done and impress more clients. In some industries a continual spend on self improvement is needed just to keep up with trends! Choosing not to spend here you could run yourself out of the industry by not being up to date.
The Shop Front
Something which constantly amazes me are business owners who feel they HAVE to have a shop front in order to be successful. Sure some niches selling retail or via shop require a presence but if you need a shopfront why not get the one which will drive foot traffic! Buying a small shop in an out of the way shopping center of commercial complex will just mean your paying money for a shopfront no one will see. Wouldn’t it be better to spend for that bigger shopping centre or roadside frontage where people can see you? Being thrifty here could save money per week which you will never recoup anyway.
However, not all aspects of your business really require a whole lot if funds. Knowing when to be frugal will not only give you additional savings but you can use it where more investment is needed.
Energy saving is not only applicable at home but most especially in your business. Leaving your computer, lights and other equipment running when not in use will not only give you lesser electric bills but it can prolong the life of the object. Moving into green premises where some of the costs are offset by water tanks and solar lighting can keep your overheads down.
Be innovative when you promote your business. If you can use the right social media platform to make announcements or disseminate promos and build an audience. Hand out coupons or promotional materials when your customers visit your store or you can team up with other businesses around you to get some referral. Also don’t forget that you can ask your family and friends to help spread the word or maybe request a happy customer to give you a testimonial or review. Spending big money on offline printing can see you cash flow (or reserves) disappear or drain very quickly.
Some good advice here from someone who knows your market and your clients could save you a tonne of money and gain you the leads you desire. Trying to go your own and guess could put you in trouble even faster.
Networking plays a big role in making your business thrive and meeting your clients and even your team can cause an impact on your budget. A business meeting has its hidden costs but try to cut corners where you can. If what you need to discuss can be done online then it would save you time, money and traveling. Try also sending and setting an agenda in advance so its focused and only takes as long as you need to cover those points. You also in most cases don’t have to pick an expensive restaurant when meeting with clients. You can choose a simple place as long as both of you will feel relaxed and comfortable. One of my associates actually calls a coffee chain here in Australia his meeting room! The coffee is cheap, WiFi is provided and someone else can clean up the mess!
Making a smart decision about what to spend your money on and when to do it can be a big choice for any business owner. Work out your pros and cons and dont hesitate to spend if your Return on Investment is apparent or obvious.
Made a decision not spend on something in your business recently? Know someone who owns a business and might not have considered our points? Leave us a comment and dont forget sharing is caring!
***Photos thanks to Tax Credits of Flickr and Wikimedia***