You obviously want to grow your business, that’s why you are in business. But what do you spend your money on? And how much?
You’ve probably heard one or more of the following:
- “You’ve got to spend money to make money.”
- “It’s a business, you must invest in your business.”
- “A real business requires capital expenditure.”
But the problem is, you don’t have much extra money. You are of course willing to invest in your business, but you really don’t know how best to use your limited capital.
There are some concrete strategies that will show you how to spend money wisely to grow without breaking the bank.
The Tackle Shop Dilemma
When it comes to fishing, not everyone is an expert or has the level of experience of another fisherman. Sometimes one’s children even know more.
Now when you go fishing, you obviously need some gear. Now, if you’ve ever been inside a fishing gear store or tackle shop, you’ll know exactly what I mean. It’s completely overwhelming deciding what to buy!
- Which fishing rod?
- What size hooks?
- How much weight?
- What type of line?
- Which bait?
Completely and utterly overwhelmed, you then ask yourself, what should I spend my limited budget on to ensure my fishing success?
Here’s a hint: The solution starts with having a discussion with the tackle shop owner.
Why Your Business is Identical to Walking into the Tackle Shop
It can feel exactly the same when it comes to your business, can’t it? You have a limited budget, you want to grow your business, and there are about a million things to spend that money on. What do you choose?
Just like in the tackle shop, to spend your money wisely, you must figure out the “What” and “Why”. To answer that, you must know what your goals are.
If you try to go fishing and all you have is a fishing rod, with no line, or bait, that’s not enough to catch any fish. Clearly you need a minimum set of equipment. If you had ALL of the equipment, would that help? Not likely, because you still need to know the RIGHT equipment for your type of fishing.
If you have the equipment, but no bait, that also is not enough. Clearly you need a minimum amount of bait. If you had ALL of the bait, would that help? No again because you need to know the RIGHT bait for your type of fishing.
If you have the right equipment and bait, but you have no idea where to go, where to cast, or how to work the rig, that is also not enough. Clearly you need some amount of knowledge to be successful. Must you learn the secrets of fishing from EVERYONE who has ever fished? Of course not. You need to gain enough of the RIGHT knowledge for your type of fishing.
3 Steps to Determine How to Spend Your Money Wisely
How do you do it?
The good news is there are some concrete steps you can take to help guide you. You can use these steps to help you determine how to spend your money wisely to grow your business.
1 Survey the Scene
Walk into that tackle shop, take a deep breath, and look around. What are the different things on which you can spend your money?
These things generally fall into the following 3 categories:
- Tools: Product, marketing, advertising, office supplies, software apps, etc
- Training and Education: Your training, courses, books, seminars, events, etc
- Your Team: Incentives, training, events, etc
To be successful, you will need to spend money on all 3 categories.
The first step is for you to simply understand what the things in your specific business are on which you can spend money in order to be successful in your industry.
2 Ask Questions
Walk up to the shop owner and ask what’s working today. Gather the opinions of others in the store.
Start with others in your industry and ask them how they spend their money. Reach out to other industry leaders and ask them. Talk with your team to see what their desires, interests, and challenges are.
A passive way to “ask questions” is to spend some time on the internet reading blogs and watching videos. Subscribe to podcasts and gather as much information as you can.
3 Know Yourself
Know the kind of fishing you want to do. What resonates with you? What works for you…or…what DOESN’T work for you?
Have you heard the phrase, “To be successful in business, you just need to copy those that are successful!” That may be true but can also be misleading. It trivializes an important concept and leaves out an important piece. To be successful, you actually need to combine “others’ successful practices” with “your own voice.” That’s where the magic happens.
To be successful yourself, you must find the methods, language, and practices that connect with you. It’s also true when deciding upon how to spend money wisely to grow your business.
For example, someone in your industry may be promoting this awesome new Contact Relationship Manager (CRM) software application. It is recommended to everyone in your industry that you buy this app. However, you’re NOT an “app person”. You are a “notebook person”. Spending money on this CRM app is likely to be a waste of money for you. Be confident in your own system and save the money.
Take another example: You’re at a networking function and have completely resonated with one of the guest speakers. You learned more in that 20-minute training than you had the entire event. At the end of the training, the speaker is promoting a course that goes into depth on that same topic. You had completely connected with this person’s methods and content. This may absolutely be something you want to invest in.
Investing in your business is paramount to growing it. The key is to figure out how best to spend those limited resources.
To spend money wisely to grow your business, you can follow these 3 steps:
- Survey the Scene
- Ask Questions
- Know yourself
Just a note: You will likely “swing and miss”. You will spend money on something and then regret it in the future. It’s OK. We all do. The key is to take the lesson from that and Fail Forward!
Flex Capital offers Invoice Discounting, Structured Finance and Purchase Order Funding solutions that inject cash flow into your business.
The source of this article can be found here.