There is a big difference between being cheap and being strategic with your money; one will help you to grow quickly and the other will only hurt your business; and yet these are often confused by entrepreneurs.
Being cheap is simply about spending less money.
Being strategic means that you’ve prioritized the best ways to spend your money to get the most return; even if that means spending a lot.
Many business owners think that cutting costs means being strategic, but that isn’t necessarily true. There are 2 primary things that separate strategic spending from being cheap…
This is one of the biggest struggles that many business owners have when it comes to their finances. They simply don’t plan. Now, you may think about skipping over this section because, well of course you plan…but do you really? Do you ever find that you’re struggling to pay a bill you forgot was coming up? Or you just never seem to be able to improve things the way you want because you can’t afford it? Those are clear signs that you’re not planning the way you should.
First and foremost, every bill and standard expense (like rent, utilities, membership dues, taxes, etc.), whether monthly, annually, quarterly, or whatever, needs to be put into your calendar like any appointment would be. Basic maintenance expenses are not a surprise; they’re just that, basic maintenance. Bills shouldn’t sneak up on you – they didn’t suddenly appear out of nowhere, you just forgot about them and didn’t make them a part of your plan.
Not only do bills and such need to be part of your schedule, but maintenance costs and saving for large expenses need to be part of that schedule and plan as well. For someone who is interested in being cheap, maintenance will fall to the way-side. That means basic upkeep of equipment and spending the money it takes to simply keep things running the way they should isn’t considered important enough to pay first and foremost. But you can’t expect to grow if you can’t even maintain where you’re at.
So whether your dream to grow includes taking more classes to add new services, improving the ambience of your facility, or increasing your marketing efforts, you need to plan these out in detail. Exactly how much will you need to make these improvements? Which one is the biggest priority first, has the best return on investment, and will provide enough extra income to be able to save for those other things? You have to break these down into an actionable plan and put it into your schedule/calendar. It’s a business duty, so schedule each step like a meeting or any other appointment.
And when it comes to growing, this can sometimes mean big expenses, so….
When those large expenses are what separates you from the business growth you’re striving for, you have to save. And I know that sounds like a very simple concept, but I often hear so many business owners saying they can’t afford to do this or that. Even with a limited income, you can put some to the side every week or month to grow your practice in whatever way you want. Whether you have a savings account or maybe do the envelope method, saving is crucial to any business’ success.
*And if you’re unaware of what the envelope method is, it’s where you get a few envelopes, and write on each what you want to save for, and slowly put cash into each envelope until you’ve saved the amount needed. For example, if you’re wanting to improve your facility and increase your marketing, you may have an envelope for facility improvements and one for marketing OR you can get really specific and have an envelope marked for new fixtures, one for new furniture, another for new signs, one for new paint, another for new branding and graphic design, and another for printing costs, etc. And while that may seem a bit overwhelming because there’s so many facets to it all, when you try to save for these things, keep your plan in mind and prioritize and save for the most important, whichever is going to give you the best return on your investment first, and then work your way down the ladder.
Don’t get cheap here! When saving, it can be tempting to save the smallest amount needed, so you pick the cheapest designer you can find, the most inexpensive furniture, or whatever – but you get what you pay for. Part of your planning and saving includes doing your research and finding the best for the money, period.
So instead of just being cheap, instead, let’s start 2018 by being strategic with our money. Plan and save in a way that will give you the most bang for your buck AND grow your business as quickly and efficiently as possible.