How to Make Good Spending Decisions for Your Business
As a small business owner, how you manage your finances is critical to your success, but deciding how to prioritize spending can be a very emotional and complicated process.
I know this because I am struggle with these decisions in my business, too! I WANT to spend on the fancy and fun things like a virtual assistant to answer emails and keep me organized, custom designed thank you cards, beautiful office décor, a complete rebrand with new logos/fonts/icons and brand guide, and a social media strategist to manage my accounts (just to name a few).
Sadly, I have to reality check myself when I feel myself reaching for the business credit card because I know that these things do not always contribute to my clearly defined business growth goals.
Here is how I decide: Is this worth the money (right now)?
Step One: Have clearly defined goals
When you have written down, clearly defined goals for the next 90 days, it is that much easier to decide what to buy now and what to put off.
Here are my goals for Q2 of 2017
- Take a 3-Month Maternity Leave (May-July)
- Have all of my 1-1 client spots filled upon my return from Maternity Leave
- Have additional services available to my clients and my community
Step Two: Have a list of “check yo-self” questions
I can ask myself a series of questions each time a significant expense comes up. If the answer is fuzzy, the answer is no.
Does this help me directly achieve my goals?
A virtual assistant to answer emails while I am on maternity leave would in fact help me achieve 2 of my 3 clearly defined goals. Custom designed thank you cards cards do not.
Is it legally required?
Sadly, beautiful office décor is not legally required. I do have to pay my taxes and renew my business license.
Will it generate an immediate return?
A rebrand of my business with new logos/fonts/icons will not generate an immediate return for my business. (Even though it would be really fun!) My business grows primarily by word of mouth and networking in the community that I serve. I build my reputation by the content I share and the testimonials from an ever-growing list of happy clients and contacts. A logo won’t change that, so it gets put on the back burner for now.
Will it save me time that I can invest in achieving my goals?
Hiring a social media strategist to manage my social accounts would save me time, BUT it wouldn’t help me to better achieve my goals. Again, my business doesn’t grow by cold leads coming through Instagram or Facebook. When I took 2 months completely off of social media, I still had new leads and signed on new clients. This is a nice to have, not a must have right now.
Other questions to consider:
Does it significantly enhance the experience of my customers?
Does it support my community/mission?
Can I get the same result without this spending?
The next time you feel yourself pulled to spend your hard-earned business dollars on something, check in with your goals to make the best decision for your business.