Do you want to run your business on the front foot, taking the game to the opposition? Or are you happy bumbling along, worrying about money and the competition getting ahead?
99% of small business owners hate spending money – and this attitude is holding them back. We’ve all heard of ‘speculate to accumulate’ but how many small business owners live by this golden rule? Not many. Most are more focused on keeping a tight clutch on the purse strings – and as a result, are missing out on winning the big, lucrative deals.
These five things will happen when you commit to spending wisely, not just cheaply.
1.You’ll spend less time ‘putting out fires’
When you do things on the cheap, you’ll lose more in the long run. If you pay rubbish wages, your best staff always have one eye on leaving. Same goes for if you expect them to soldier on with rubbish equipment. I’ve lost count of the amount of times I’ve been speaking on the phone, only to be told: ‘hang on, my computers going really slow today.’ I know good people who’ve left jobs just hoping that their next employer will have decent I.T.!
If you expect your people to work with low quality materials / equipment, once you build in the extra time spent on the workarounds, plus the associated demotivation, make no mistake, you are actually losing money – probably a significant amount.
2.There’ll be less nasty surprises
Buying cheap is a really really bad idea. Cheap price tags don’t mean savings.
There’s no point hammering a supplier down to the very last penny when you’re negotiating a contract. If you leave no margin in the deal for them, you might feel an ego boost that you ‘haggled them down’ but that will wear off in a day or too. In this situation, you can bet the supplier will be working hard to claw back ground and find other ways to make money from you down the line, once you are committed.
And sometimes it’s really big ‘trusted’ brands who stitch you up – naming no names, but I know one huge I.T supplier that, for customers taking their ‘bargain’ CRM packages, always precede to demand huge fees for configuring or training (which you can’t get by without one or the other). Always check the small print…
Beware those who come bearing low bids. If it sounds too good to be true, it most likely is!
3.You’ll be able to think straight
Buy quality you can rely on and you’ll never have to think about it again. Buyers’ remorse is a proven psychological phenomenon that can rob you of creative energy – you can’t have quality ideas when your brain is busy bemoaning and berating…
Buyers’ remorse will only bring negative energies into your business. Avoid it like the plague – there’s an old saying, “Buy the best and you’ll only cry once.” You might not need the cream of the crop, but you certainly want quality you can rely on every time.
4.You’ll get better advice
There is a definite tendency in small businesses to take advice from people who don’t fully know what they’re talking about – your friend, mum, sympathetic barman – but avoid taking advice from people who are further down the success road than you are.
Hiring a consultant, coach or agency to push you on the road to achieving your objectives is an investment. If you stick to their teachings / insights / plan, you will get a huge ROI.
5.You won’t look cheap.
If you act cheap, people will expect you to be cheap. If you trade on being the ‘lowest bid’, you’ll never stay the cheapest forever – there is always someone who can come in and do it for less eventually. And so the race to the bottom continues…
You’ll never get the big clients with leaflets printed on tracing paper. If your vans are dirty, with plumes of smoke shooting out the exhaust, your business has got an image problem.
Sort it out. You will never grow if you can’t project the image of success.
To sum up, you should only buy what you need – but when you do, invest sufficiently so it does what you really need it to do. You shouldn’t spend a penny with no specific return in mind. Decide what you ultimately want to achieve, and forearm yourself to get it.
Remember, as a a business leader, do you want to operate on the front foot, or the back foot? I know which is less stressful…do you?
If you want to get some advice on a pragmatic, healthy approach to spending in a way that makes money, drop me a line at firstname.lastname@example.org
photo credit: <a href=”http://www.flickr.com/photos/59937401@N07/5474773210″>Currency and Property</a> via <a href=”http://photopin.com”>photopin</a> <a href=”https://creativecommons.org/licenses/by/2.0/”>(license)</a>